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Full text of "Market research for providers and other partners : final report on hospital communication"

MARKET RESEARCH FOR PROVIDERS AND OTHER PARTNERS 



FINAL REPORT ON HOSPITAL COMMUNICATION 



Prepared by: 

Barents Group LLC 

2001 M Street, N.W. 

Washington, DC 20036 



Prepared for: 

Health Care Financing Administration 

Office of Research and Demonstrations 

7500 Security Boulevard 

C-3-15-06 

Baltimore, MD 21244-1850 

Contract No. 500-95-0057TO03 



February 9, 1998 



ACKNOWLEDGMENTS 

This report was prepared by Barents Group LLC and Project HOPE, Center for Health Affairs 
under contract to the Health Care Financing A ^ministration, Contract No. 500-95-0057, T.O. 3. 
Individuals contributing to the report included: Laura Esslinger and Kathryn Langwell, from 
Barents Group; Jo Ann Lamphere, Dr. P.H., formerly with Barents Group and currently with the 
American Association of Retired Persons; Tami Mark, Ph.D., Jennifer Dunbar, and Estela 
Rodriguez from Project HOPE, Center for Health Affairs, and Garrett Moran, Ph.D. and Hellen 
Gelbana, Ph.D. from Westat, Inc. The authors would like to thank the many individuals and 
organizations who took the time to provide input into this project. 



Barents Group LLC i February 9, 1998 



TABLE OF CONTENTS 

ACKNOWLEDGMENTS i 

EXECUTIVE SUMMARY 1 

PURPOSE 4 

BACKGROUND 5 

FINDINGS 9 

Currency and Accuracy of Materials 9 

Timeliness of Communications 12 

Consistency and Coordination 18 

Simplification of Communications 19 

Additional Information 24 

Information Dissemination 30 

Consultations with the Hospital Industry 33 

APPENDIX A SUMMARY OF HOSPITAL ADVISORY PANEL MEETING 35 

APPENDIX B METHODS 44 

APPENDIX C LITERATURE REVIEW 48 

APPENDIX D INTERVIEW GUIDES 50 

APPENDIX E CURRENT HCFA COMMUNICATION PROCESSES 

AND METHODS .;.„....... 57 

APPENDIX F HOSPITAL MODULE FOCUS GROUP REPORTS 72 



Barents Group LLC ii February 9, 1998 



EXECUTIVE SUMMARY 



Purpose 

The Health Care Financing Administration (HCFA) has initiated a comprehensive strategy to 
coordinate existing communication activities within HCFA and develop innovative, effective 
approaches that make information accessible to all program participants. To develop these 
strategies for hospitals participating in the Medicare, HCFA funded this study to conduct Market 
Research for Hospitals. This research is designed to answer two central questions: 

1 . What information do hospitals need and want from HCFA? 

2. How can this information be most effectively made available? 

Background 

There are over 5,100 Medicare-certified short stay hospitals in the United States. Hospitals 
represent a diverse group of health care providers which differ with respect to their mission, 
ownership, complexity and size, competitive environment, populations served, financial 
situation, physical facility, and patient costs. The information needs of a hospital and the process 
by which these needs may be met are largely dictated by hospital characteristics. Several trends 
in the hospital market are changing the way hospitals acquire knowledge and adapt operations, 
including: the increasing prevalence of Medicare managed care; consolidations, acquisitions, and 
mergers within the hospital market; and the integration of hospital services with other types of 
care to form health systems and community networks. 

Hospitals licensed in their state of operations may apply to participate in the Medicare program. 
The processes through which the conditions for participation in Medicare are initially verified, 
and the periodic surveys necessary for monitoring, vary depending upon whether the facility is 
accredited by a nationally recognized accrediting body with deemed authority. However, all 
hospitals participating in the Medicare program must comply with the same general operational 
requirements and complete the same ongoing Medicare processes. It is during ongoing 
operations that hospitals have the greatest need for communication with HCFA and its 
contractors. 

Methods 

The approach taken to identify the information needs and most effective communication 
strategies for hospitals included: 

♦ Convening a Hospital Advisory Panel composed of representatives from hospital industry 
organizations, hospital operational and management staff, and representatives from HCFA 
Central and Regional Offices to provide detailed input on research methods and issues to 
examine; 

♦ Meetings with HCFA staff in the Central Office to gather information on current interactions 
among HCFA's divisions and with hospitals to develop a conceptual model of existing 
information flows and communication; 

Barents Group LLC 1 February 9, 1998 



♦ A literature review to identify issues that were raised within the hospital sector concerning 
interactions with HCFA and information sought by the hospital industry from HCFA; 

♦ Unstructured interviews with representatives of HCFA Regional Offices, fiscal 
intermediaries (FIs), hospital industry a: sociations, and individual hospitals to obtain 
background and guidance on current information flows, information needs, and 
communication strategies; 

♦ Site visits to Atlanta, Chicago, and San Francisco to obtain in-depth knowledge of current 
hospital operations and interactions with HCFA. These site visits included meetings with 
HCFA Regional Office staff, FIs, state survey agencies, and others; and 

♦ Focus groups with hospital and FI staff to gather more information on issues identified 
during the interviews and site visits. 

Findings 

Hospitals and other interviewees identified key areas in which communications between HCFA 
and hospitals serving Medicare beneficiaries could be improved either by changing the nature of 
exr ing communication processes and materials or by instituting new communication strategies. 
Findings from the market research were synthesized into seven major communications issues and 
areas for improvement, including those related to: 

♦ Currency and accuracy of materials - Hospitals report that HCFA provides a wide range of 
materials but that these materials are sometimes out of date or contain inaccurate information; 

♦ Timeliness of communications - Hospitals need timely information in order to meet HCFA 
requirements and resolve issues before they become problems. At present, hospitals report that 
they frequently do not receive information, and/or answers to their questions, in time to 
prepare for changes in policy and requirements; 

♦ Consistency and coordination - Hospitals report that there are differences in understanding 
and interpretation of policy and regulations among HCFA offices and across FI regions; 

♦ Simplification of communications - Information provided by HCFA is often difficult for 
hospitals to access, complex and confusing, 01 requires great effort to ensure that the 
information accessed is complete and up-to-date; 

♦ Availability of information - While HCFA makes much information available to hospitals, 
there is additional information that, if available, would help hospitals to operate more 
effectively and efficiently; 

♦ Information dissemination - Hospitals suggested several strategies, in addition to those 
currently employed by HCFA and its contractors, that would increase the effectiveness of 
information dissemination and meet the needs of different types of hospitals; and 

♦ Consultations with the hospital industry - Hospitals would like to have increased involvement 
in development of policy and new regulations, as well as participating in joint efforts with 
HCFA to improve operations of the Medicare program. 



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Hospitals, and other related organizations, provided specific and detailed suggestions to address 
these issues and improve communications, as well as examples of their communications needs. 



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PURPOSE 

The Health Care Financing Administration is conducting market research to understand the 
information needs of Medicare beneficiaries, providers, managed care plans, and others who 
interact with the Medicare program. Information gathered through this market research will be 
used to coordinate existing HCFA communication activities and to develop innovative new 
approaches to assist all program participants in accessing Medicare information. Creating a 
far-reaching and innovative approach to meet these strategic objectives requires an enhanced 
understanding of providers' current experience with HCFA's role in administering the Medicare 
program, as well as their information needs. 

This project, "Market Research for Providers and Other Partners," is providing a foundation of 
information to assist in the development of these strategies for hospitals, physicians, and other 
partners that serve Medicare beneficiaries. The study addresses two central questions: 

1 . What information do providers and other partners need and want from HCFA? 

2. How can this information be most effectively made available? 

The broad goals of HCFA's communication strategy reach beyond providing easily accessible 
information on Medicare benefits and coverage. HCFA could become a source of information to 
Medicare beneficiaries and providers on a variety of topics aimed at improving and maintaining 
health status and quality of life, including health promotion and prevention approaches, treatment 
options for medical conditions, and other issues that concern an aging and/or disabled 
population. The methods used to collect information from HCFA, hospitals and other 
organizations to assess information needs and to identify effective command action strategies are 
described in Appendix E. 

The initial three groups selected by HCFA as the subjects of the "Market Research for Providers 
and Other Partners" project were: hospitals, physicians, and managed care organizations that 
contract with the Medicare program. The focus of this report is the information needs of hospitals 
that provide inpatient care to Medicare beneficiaries and the means by which this information 
can best be conveyed to multiple and diverse actors within hospitals across the United States. 



Barents Group LLC 4 February 9, 1998 



BACKGROUND 

There are over 5,100 Medicare-certified short stay hospitals in the United States. Hospitals 
represent a diverse group of health care nroviders which differ with respect to their mission, 
ownership, complexity, size, competitive environment, population served, financial situation, 
physical facility, and patient costs. About half of all hospitals have fewer than 100 beds. Fifty- 
eight percent of hospitals are voluntary; voluntary hospitals account for three-quarters of all 
Medicare payments. Over half of all hospitals are located in urban areas. About 23 percent of 
hospitals are certified by HCFA as teaching hospitals. In FY 1996, inpatient and outpatient 
hospital care throughout the country accounted for over $115 billion in Medicare funds. ' 

Hospitals represent the largest share of national health spending. As Medicare is the largest 
single payer for hospital care, the program's policies have an important impact on the financial 
performance of hospitals. Another force, the growth of managed care and Medicare risk 
contracting, also has had an impact on hospital performance. Managed care organizations have 
reduced inpatient hospital utilization and negotiated price discounts for their members. Hospitals 
have been seeking alternative sources of revenue by broadening the scope of services they offer 
and by integrating their services with those of other providers to increase market share. 

Changes in the Hospital Market 

Recently, several trends in the hospital market have begun to change the way hospitals acquire 
knowledge and adapt operations. 

♦ The prevalence of managed care is increasing in many areas of the country. This new 
environment has different interpretations of "medical necessity" than fee-for-service 
insurance. For hospitals, managed care organizations increase cost containment pressures by 
reducing inpatient stays and negotiating price discounts or capitated rates for hospital services. 

♦ Consolidations, acquisitions, and mergers within the hospital market are changing the nature 
of hospital competition. Corporations and chains are purchasing small, non-profit community 
and rural hospitals that have difficulty competing on their own. Such market concentration 
changes communications structures by centralizing authority and resources. 

♦ Hospitals are integrating hospital services with other types of care to form health systems and 
community networks. Integration allows hospitals to better coordinate patient care and 
establish partnerships with clinics, physician practices, skilled nursing facilities, home health 
agencies, etc. to increase efficiency in operations. Many hospitals own other types of facilities 
as a way of diversifying their income sources and diffusing hospital overhead costs. 

All of these changes have implications for how HCFA communicates with hospitals. HCFA may 
want to anticipate and build in the ability to adapt to new communications linkages. 
Additionally, methods could be tailored to improve communications with particular types of 



1 Estimate includes capital and durable medical equipment, as well as PPS and non-PPS facilities. 

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hospitals. HCFA has taken the first step towards such flexibility by seeking to understand how 
hospitals assess the effectiveness of communications and their needs for information. 

HCFA and Hospital Communications 

Hospitals licensed in their state of operations may apply to participate in the Medicare program. 
The processes through which the conditions for participation in Medicare are initially verified, 
and the periodic surveys necessary for monitoring, vary depending upon whether the facility is 
accredited by a nationally recognized accrediting body with deemed authority. Regardless of how 
they meet the conditions for participation, all hospitals participating in the Medicare program 
must comply with the same general operational requirements and complete the same ongoing 
Medicare certification processes. It is during the ongoing operations that hospitals have the most 
contact with and need for communication with HCFA and its contractors. 

Hospitals have ongoing needs for information and communication with HCFA in order to 
operate successfully and to remain in compliance with HCFA standards. Information from 
HCFA comes from a number of different sources, including: 

♦ fhe HCFA Central Office in Baltimore, 

♦ The HCFA Regional Offices, 

♦ Fiscal Intermediaries, 

♦ State Survey Agencies, and 

♦ Peer Review Organizations. 

Hospitals are responsible for obtaining, understanding, integrating, and operationalizing 
information received from all these sources and for seeking clarification of specific aspects of 
Medicare processes, when necessary. 

Certification and Accreditation Processes 

Most organizations in the hospital market have a long-term, established relationship with HCFA 
initiated at some point in the past by the Medicare certification process. Since there are relatively 
few new hospitals established across the country in any given year, certification of new hospitals 
is not a major component of HCFA's communications. However, interviewees in various areas 
of the country reported a marked increase in the number of Medicare certifications that must be 
reissued under the name of a new legal entity to account for a change in ownership. Hospitals 
also noted their involvement in the certification of hospital-owned subacute and ancillary 
providers. 

There are two ways in which a hospital can participate in Medicare: (1) meet the Medicare health 
and safety requirements (conditions of participation) as verified by an initial HCFA inspection 
and periodic surveys by the State survey agency. Or, (2) participate by virtue of its accredited 
status. Accreditation organizations with deeming authority take the responsibility for ensuring 
that hospitals receiving accreditation are in compliance with Medicare certification requirements 
as well as other additional industry-wide standards established outside of the Medicare program. 



Barents Group LLC 6 February 9, 1998 



This way, accredited hospitals are engaged in a single review process for both HCFA and 
industry standards that does not directly involve HCFA or its contractors. 

Currently, the two major organizations with deeming authority for Medicare acute care hospitals 
are the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and the 
American Osteopathic Association (AOA). JCAHO accreditation, held by roughly 70 to 80 
percent of hospitals in the Medicare program, is increasingly important as a recognition of 
quality in the hospital market. Growth in the proportion of JCAHO hospitals can, in part, be 
attribute J to the expansion of the managed care market where accreditation is often required for 
credentialing. 

Ongoing Operations 

Once a hospital is certified to participate in the Medicare program, ongoing Medicare operations 
require continuing interaction and information exchange between the hospital and HCFA. Both 
the HCFA Central Office (HCFA CO) and the Regional Offices (RO) have specific 
responsibilities with respect to communication with the hospital. HCFA delegates almost all 
financial and quality responsibilities to its contractors, the FIs and PROs, that work directly with 
the hospitals. A Medicare hospital maintains close communications with HCFA, and its 
contractors, on an ongoing and periodic basis for the following functions and requirements: 

♦ Cost Reports and Audits . Medicare hospitals submit an annual cost report to the FI which 
details the organization's finances and is the basis for calculating the hospital's Medicare rate. 
Cost reports provide information that is used to determine what, if any special supplemental 
payments the hospital will receive beyond straight DRG reimbursement, such as graduate 
medical education funding or disproportionate share hospital payments. FI staff conduct desk 
report and on-site audits to verify the accuracy of a hospital's cost report. The audit team may 
make adjustments, when necessary, to the hospital's Medicare rate. 

♦ Claims Processing and Reimbursement . Billing staff at hospitals submit claims to the FI either 
on paper or through electronic data interchange. Each FI uses one of two major claims 
processing systems, the Arkansas or Florida shared system, to interact with the FI. Hospitals 
receive remittance advices at least weekly from the FI which detail claims paid versus 
rejected. Denied claims can be corrected or appealed by the hospital. 

♦ New Regulations and Changes in Policy . HCFA's Central Office has responsibility for 
developing new regulations based on legislation and for making changes in existing 
regulations. In some cases, hospitals are requested to participate in and to provide data, 
information, or comment for regulations-in-development. New regulations are translated at 
HCFA CO into the form of manual instructions, and transmitted to ROs. Each RO may clarify 
or add to information received from HCFA CO before sending it on to the FIs in its region. 
Each FI creates operational instructions for implementing the new policy and distributes these 
to hospitals in their service area through monthly bulletins or newsletters. 



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Other Potential Interactions and Optional Activities 

In addition to the required aspects of participation in the Medicare program, a hospital may also 
interact with HCFA on any of the following optional or special case processes: 

♦ Quality Improvement Projects . Hospitals may provide information to or participate in quality 
improvement initiatives that are developed and led primarily by PROs. Some national 
initiatives and campaigns are directed by the HCFA Central Office. 

♦ A ppeals of Cost Report Adjustments . If a hospital is dissatisfied with adjustments made to its 
annual cost report during the audit process and is unable to resolve these issues with FI 
auditors, then it may appeal FI decisions to a higher authority. The Blue Cross and Blue 
Shield Association, the prime contractor for FI services, handles appeals of adjustments under 
$10,000. The Provider Reimbursement Review Board (PRRB) at HCFA CO hears cases 
involving $10,000 or more. The appeal process includes an opportunity for both sides to 
formally state their opinions and negotiate a possible settlement before appearing at a hearing. 

♦ Beneficiary Complaint Investigations . Beneficiary complaints are investigated either by the 
appropriate HCFA Regional Office and/or the state survey agency, with possible involvement 
of the local PRO in cases where judgments concerning medical necessity or appropriate 
medical practice are involved. The structure of the complaint investigation process varies 
somewhat from state to state but generally the RO is responsible for approving initial 
investigations and final decisions which are investigated by the state survey agency. COBRA 
violation investigations may take on a different format in some regions. 

♦ Fraud and Abuse Investigations . There are several levels of fraud and abuse investigations in 
which a hospital may become involved. FI medical review units identify hospitals with 
repeated errors or problems with claims. This FI first attempts correction action to educate 
hospital staff of the proper way to file and code problem claims. If education does not resolve 
the problems, then the FI Program Integrity Unit is involved. If this unit detects fraud and 
abuse, it may report the hospital to the Office of Inspector General (OIG) for a full-scale fraud 
and abuse investigation. Some investigations may be initiated by OIG or a HCFA Regional 
Office in response to national or local concerns of widespread fraud and abuse. These 
investigations may target hospitals of special concern to OIG and/or the RO or may involve a 
random sample of hospitals in the area. 

Appendix E describes and depicts the ongoing process of communication with Medicare 
hospitals and the interactions between HCFA, its contractors, and hospitals in more detail. 



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FINDINGS 

Hospitals and other interviewees identified key areas in which communications between HCFA 
anr' hospitals serving Medicare beneficiari s could be improved either by changing the nature of 
existing communication processes and materials or by instituting new communication strategies. 
The findings section of this report is divided into sections pertaining to the following 
communications issues and areas for improvement: 

♦ Currency and accuracy of materials, 

♦ Timeliness of communications, 

♦ Consistency and coordination, 

♦ Simplification of communications, 

♦ Availability of information, 

♦ Information dissemination, and 

♦ Consultations with the hospital industry. 

Currency and Accuracy of Materials 

Hospitals report that HCFA provides a wide range of materials but that these materials are 
sometimes out of date or contain inaccurate information. (See Table 1) 

Clear and accessible information on Part A operations of the Medicare program is very important 
to the smooth functioning of the program for HCFA beneficiaries and for participating hospitals. 
As almost every interviewed hospital mentioned, HCFA often cites the various manuals 
discussing the Part A line of business as major information sources for several key operational 
areas. Hospitals use the manuals for details of how to operate their Medicare line of business. 
Currently, HCFA manuals may contain inaccurate information, are poorly organized, and are 
difficult to maintain. Of particular concern is that there have been changes in laws and 
regulations that have yet to be reflected in the Manual. As a result, basic information and 
requirements for operational areas are not available in a complete, accurate, and easily accessible 
form for hospitals. 

Interviewees indicated that the HCFA manuals would be improved by: 

♦ Updating the contents of the manuals to reflect changes in regulations and policies, including 
incorporation of the revised information requested on annual cost reports and, as appropriate, 
RO-specific policy memoranda and instructions to FI auditors; 

♦ Employing a more systematic and regularly scheduled means of updating all policy and 
operational information. 

Interviewees recommended that HCFA establish a system to update the manuals on a regular and 
timely basis. HCFA could consider implementing a schedule by which sections of each manual 
are revised. Additionally, hospitals encouraged HCFA to adopt practices that would facilitate the 
upkeep of manuals. If manual transmittals were to arrive at hospitals on a regularly scheduled 
basis, then organizations receiving transmittals would be able to track whether each edition has 



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arrived and periodically budget time to assimilate new information. Currently, the timing of 
transmittals is sporadic and transmittals for soms manuals are too numerous to track effectively. 



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i i 



Table 1 Issues Related to Currency and Accuracy of Materials 



General Issue 


Specific Issues 


Suggested Changes 


Hospitals report that HCFA 
provides a wide range of 
materials but that these 
materials are sometimes out of 
date or contain inaccurate 
information. 


1 . Policy and operational 
requirements change 
frequently, but HCFA 
updates materials only 
infrequently and does not 
have a regular schedule 
for providing updates. 


♦ HCFA should update materials on a scheduled basis and announce this 
schedule, so that hospitals can track these updates to ensure that they are 
current. 

♦ Each Manual update should be created as a replacement for specific 
sections of the current Manual to allow hospitals to discard old sections 
and insert updates. 

♦ HCFA should update the CD-ROM version of the Manual as frequently as 
the hard copy Manual is updated. 

♦ HCFA should also make all policy and regulatory updates available 
through the HCFA Web Site to allow hospitals to ensure that they have 
the most current information. 




2. Hospitals would like 
current information on 
regulations in development 
or recently implemented so 
that they can participate in 
the development process 
and better prepare for 
changes. 


♦ HCFA should publish, on a regular basis, a matrix showing all policies 
and regulations currently out for comment and the deadlines for receipt of 
feedback. 



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February 9, 1998 



Hospitals also recommended that HCFA replace whole sections of the manual when making 
revisions rather than, for instance, sending revisions to a portion of a chapter. The current system 
for updating manuals is difficult, as the maintainer must carefully identify which sections are 
being replaced and cannot simply drop in each transmittal. Currently, a single transmittal may 
contain changes to numerous non-contiguous manual sections. Both hospitals and FIs would like 
to be able to pull out an old section and drop in the new one. 

According to hospitals, one example of an area where the currency of HCFA materials lags 
behind operational deadlines is in the provision of certain basic instructions for completing cost 
reports. Namely, a set of cost report instructions is available in advance of hospital filing 
deadlines but may not reflect changes in regulations and new policy interpretations to be used by 
FI auditors. For the hospital, this means that the instructions by which they complete cost reports 
are not the same as the actual requirements for that year's filing. HCFA should provide complete, 
up-to-date instructions prior to the time when hospitals must use these instructions to complete a 
cost report. 

In addition to lags in updating the hardcopy version of HCFA manuals, updates to the CD-ROM 
containing HCFA manuals are completed some time after those same changes are reflected in the 
hardcopy versions of manuals. Hospitals suggested that HCFA update its CD-ROM as frequently 
as on-paper manual transmittals are released. 

Hospitals suggested that policy and regulatory updates could be made available through the 
HCFA Web Site. If such on-line distribution was consistent, then hospitals could use the HCFA 
Web Site to ensure that they have the most current policy information. 

Comment periods for various regulations are difficult to track, as this information is not available 
in one location. Hospitals requested that HCFA publish, on a regular basis, a matrix showing all 
policies currently out for comment and the deadlines for receipt of feedback. Hospitals would 
like current information on regulations in development, or recently implemented, so that they can 
participate in the development process and better prepare for changes. The availability of such 
information through the HCFA Web Site is currently sporadic and deadlines are dispersed in 
various files and subject areas rather than displayed for quick reference. Ideally, such information 
would be updated weekly. 

Timeliness of Communications 

Hospitals need timely information in order to meet HCFA requirements and resolve issues before 
they become problems. At present, hospitals report that they frequently find that they do not 
receive information in time to operationalize changes in policy and requirements prior to 
implementation dates of changes. In addition, delays in receiving answers to questions may 
result in hospitals failing to meet specific HCFA requirements on time or submitting inadequate 
or incorrect information to HCFA or the FI. (See Table 2) 

Interviewees raised a variety of issues concerning the timeliness of HCFA oversight and 
evaluation methods. They stressed the relationship of timely feedback on performance from 



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HCFA with the ability of organizations to learn from their mistakes and meet operational 
deadlines. Hospitals aiso raised some concerns that untimely communications may create unfair 
situations for hospitals. 

The timing of HCFA communications not only affects hospital operations but may aiso affect 
beneficiaries directly. Hospitals requested that HCFA notify them of claims payments, partial 
denials, and denials before mailing an EOMB to the beneficiary. Hospital staff added, with 
concern, that receiving an EOMB for denied services can be especially distressing to the 
beneficiary. Such distress is unnecessary in many cases and could be avoided by building in a 
short response time between when the hospital receives notification of a partial or full denial and 
when an EOMB is generated. Currently, the beneficiary may receive information on a denial 
before the hospital does, leaving the hospital ill-prepared to answer and resolve concerns as 
beneficiary inquiries arrive. 

Hospitals rely on HCFA and FI personnel to provide clarifications and interpretations of 
Medicare policy. Many times, hospital operations cannot be altered to come into compliance 
with new policies until answers to questions of interpretations are received. Almost all hospitals 
interviewed noted examples of situations where they did not receive a policy clarification or 
interpretation in time to meet either Medicare or hospital operational deadlines, such as cost 
report submission deadlines or situations of beneficiary medical decision making. 

Interviewees stressed that the general timeliness of response to inquiries, especially in the face of 
established deadlines, could be improved both at the regional and national level. They 
recommended that HCFA establish customer service standards for timeliness of response to 
spoken and written correspondence addressed to HCFA and its contractors. Hospitals encouraged 
HCFA to use call and letter tracking to monitor personnel performance in these areas. It was 
noted that a tracking system could not only prevent inquiries from getting lost within HCFA 
operations, but could also allow particularly time sensitive correspondence to be flagged. Also, if 
HCFA and contractor personnel displayed increased sensitivity to the time constraints of 
hospitals by discussing projected response times with callers, then hospitals would feel less 
concerned. The caller would be better informed as to when they might receive a response, and 
HCFA, or its contractors, would be aware of any operational deadlines the hospital faced. 

Some of the difficulties in reaching HCFA or contractor staff, reported by interviewees, were 
more mechanical in nature. Hospitals suggested that HCFA establish HCFA and contractor 
standards for phone communication, including: 

♦ Maximum wait time on hold; 

♦ Explanation of the reason for transferring call to another individual prior to initiating transfer; 

♦ Designation of an alternate contact on all individual voice mail outgoing messages; and 

♦ Access to an operator within the voicemail system. 



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Hospitals also requested that HCFA require contractor staff to respond to inquiries from 
consultants and other hospital-designated representatives with the same standards as those 
expected for hospitahstaff inquiries. 

Both HCFA contractors and hospitals encouraged HCFA to provide adequate advance notice of 
implementation of changes in policies affecting hospital operations. Hospitals encouraged HCFA 
to improve the timeliness of the delivery of information on changes in policy from HCFA to the 
Fls. Sometimes hospitals receive notice of policy changes via FI bulletins after implementation 
dates have already passed. By this time, some hospitals will already have had claims denied or 
will be unable to make necessary systems changes before denials occur. Many hospitals must 
revert to manual billing or hold onto bills for a time until programmers can make the appropriate 
systems changes. Two examples of retroactive announcements cited repeatedly by hospitals are: 
1) the release of the revised reimbursement policies for cardiac catheter services, and 2) changes 
to indirect billing. 

Hospitals feel that it is too difficult to correct problems or errors in claims. This difficulty is 
compounded when a batch of claims is submitted incorrectly as a result of not receiving 
notification of a policy change. Once the hospital receives retroactive notification of the policy 
change it does not have an efficient way to correct such a volume of claims. It may take months 
for a hospital to correct problem claims (e.g., deductibles for inpatient blood). These claims 
remain suspended in the system and add to the hospital's accounts receivable. Delays particularly 
create problems for small hospitals that sometimes make payrolls based on HCFA 
reimbursements. 

In addition to providing notice of changes, hospitals emphasized the importance of developing 
clear protocols for operationalizing policy in advance of implementation. Hospitals 
complimented HCFA on improving the timing with which it informs the industry of major 
changes. However, industry representatives cautioned HCFA that it must be prepared to present 
operational details of new policies at the time major changes are explained to the hospital 
community. They recommended producing audit guidelines detailing HCFA expectations as a 
framework for hospitals to implement new policies. 

Hospitals and Fls raised some additional recommendations pertaining to timeliness: 

♦ Inform hospitals of their Medicare rates prior to the beginning of the new rate year. Current 
delays prevent hospitals from completing accurate budget planning. 

♦ Set and adhere to timeframes for completing cost report audits to ensure that evaluation occurs 
based on the same policy interpretations in existence at the time of filing; and 

♦ Eliminate the practice of charging interest on credit balance adjudications of cost reports since 
most delays are related to the time it takes FI auditors to complete reports. Numerous 
interviewees commented on the "unfair" nature of HCFA interest policies. 

Hospitals also indicated that some information supplied by HCFA is not available on a real-time 
basis and therefore delays or impedes hospital operations. Hospitals should be able to access up- 



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to-date PS&R data at any time during the year. PS&R data are currently made available 120 days 
after the close of the fiscal year and do not contain information on claims whose processing was 
delayed for medical review. Hospitals not only need PS&R data to complete current cost reports, 
but also to stay apprised of how older cost re ->orts will be settled, since settlements are based 
upon PS&R data that are no more than six months old. 



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February 9, 1998 



Table 2: Issues Related to Timeliness of Communications 



General Issue 


Specific Issues 


Suggested Changes 


Hospitals need timely information in 
order to meet HCFA requirements and 
resolve issues before they become 
problems. At present, hospitals report that 
they frequently find that they do not 
receive information in time to 
operationalize changes in policy and 
requirements prior to implementation 
dates of changes. In addition, delays in 
receiving answers to questions may result 
in hospitals failing to meet specific 
HCFA requirements on time or 
submitting inadequate or incorrect 
information to HCFA or the FI. 


1 . Medicare beneficiaries sometimes receive 
EOMB statements prior to the hospital 
receiving notification from the FI that a claim 
has been made. If the beneficiary then calls 
the hospital with questions or concerns, the 
hospital cannot assist them since they do not 
have information on the claim. 


♦ EOMBs should be timed to ensure that 
hospitals receive payment information prior 
to, or at the same time as, beneficiaries 
receive the EOMB. 




2. When hospitals contact HCFA or the FI with a 
specific request for information or 
clarification of rules, either by phone or in 
writing, it often takes an extended time period 
before the hospital receives an answer to their 
inquiry. In some cases, the hospital must make 
repeated inquiries before an answer is 
forthcoming. 


♦ HCFA should establish standards for FI and 
HCFA staff timeliness of response to spoken 
and written correspondence with hospitals. 
Special standards should be established for 
inquiries that are related to FI or HCFA 
established deadlines that hospitals must meet 




3. When hospitals contact HCFA or the FI by 
telephone, it often takes a great deal of time to 
reach the appropriate person, with busy 
signals, extensive numbers of rings, and the 
hospital may be passed from voice mail to 
voice mail, or person to person before 
reaching the appropriate person. Sometimes 
numerous calls must be made because no one 
answers or it is not possible to reach a 'real' 
person to explain the nature of the call. 


♦ HCFA should establish standards for phone 
communication for FI and HCFA staff, 
including wait time on hold, explanation of 
call transfer, designation of alternate point of 
contact, and access to an operator. 



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February 9, 1998 



i 



General Issue 


Specific Issues 


Suggested Changes 


i 


4. HCFA sometimes issues new rules and 
regulations that require major changes in 
hospital operations a very short time before 
the effective date, which makes it impossible 
for hospitals to meet the deadline. 


♦ HCFA should develop a process ibr setting 
the timeframe for implementation of changes 
in policy and requirements that recognizes the 
time required by hospitals to make significant 
operational changes. 

♦ HCFA should seek input from hospitals on 
the time that will be needed by the average 
hospital, and by different subsets of hospitals, 
in order to implement new regulations. The 
schedule for development on guidelines and 
disseminating new requirements should be 
determined in advance, and the 
implementation schedule should be 
determined based on this timeframe. 




5. Hospitals sometimes do not receive 

information on their new Medicare rates and 
the calculation process prior to the new year. 
This makes it difficult for hospitals to plan 
and for hospitals to ensure that they are 
submitting accurate claims. 


♦ HCFA should officially inform hospitals of 
their Medicare rate and calculations well in 
advance of the beginning of the year. 




6. Delays in conducting audits and in reporting 
audit results to hospitals sometimes cause 
serious problems for hospitals. 


♦ HCFA should set and monitor timeframes for 
completing audits of cost reports to ensure 
that the audit is based on the same policy 
interpretation that existed at the time the cost 
report was filed. 

♦ If an extended delay in audits of cost reports 
occurs, hospitals should not be subject to 
penalties or interest that extends back several 
years because of these delays. 




7. Some information supplied by HCFA is not 
available on a real-time basis and therefore 
delays or impedes hospital operations. 


♦ Hospitals shouid be able to access up-to-date 
PS&R data at any time during the year. 



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February 9, 1998 



Consistency and Coordination 

Hospitals report that there are differences in understanding and interpretation of policy and 
regulations among HCFA offices and across FI regions. (See Table 3) 

A major issue raised by hospitals and others interviewees was a lack of consistency across 
regions in the information received by and interactions with hospitals. A number of organizations 
indicated that the most significant barriers to consistent communication between HCFA, HCFA 
contractors, and hospitals are related to differences in staff knowledge, organizational experience, 
and operational structures across regions. From the hospital perspective, many HCFA and FI 
staff do not possess the knowledge of hospital operations or medical decisionmaking that is 
necessary to consistently supervise/evaluate hospital performance in the Medicare program, 
including providing interpretations of medical coverage policy during focused medical reviews. 
HCFA CO, ROs, and FIs also expressed concerns with the level of knowledge of their own staff 
and the lack of shared knowledge across regions. Most interviewees suggested that consistency 
and coordination across regions could be improved if HCFA were to standardize certain aspects 
of regional operations. Specific requests for consistency included development of standardized: 

♦ I I customer service and education mechanisms, such as a beneficiary hotline; 

♦ Worksheets, publicly released audit guidelines, and definitions of terminology for problem 
areas in FI audits, such as MSP investigations and ISIS; and 

♦ Process standards for completing FI duties, such as conducting an entrance and exit interview 

with hospital staff during a cost report audit. 

9 
Responsibility for developing uniform guidelines for all FIs in specific areas should be assigned 
to an accountable individual in HCFA's Central Office, who would also be responsible for 
ensuring that new interpretations and guidelines are disseminated to all RO and FI staff. 
For example, almost all of the hospitals interviewed had suggestions of how to improve 
consistency in the FI audit process. The most common comments were that on-site visits took too 
long to accomplish and that the need for follow-up investigations or questions should be reduced. 
Additionally, hospitals would like FI auditors to: 

♦ Eliminate the need to request the same information more than once, 

♦ Complete desk audits to direct and limit the audit process prior to the site visit, 

♦ Narrow scope of the audit by focusing on reviewing abnormalities between this year and last, 

♦ Detail adjustments and reasons why these adjustments were made in their work papers, 

♦ Try to reach an agreement on all disputed issues before closing the audit process, 

♦ Avoid waiting until close to the end of the fiscal year to resolve outstanding issues, and 

♦ Implement the cost report audit timeframes established by MTAG and enforce FI compliance 
with these expectations. 

There are also coordination challenges involved in the delivery of information from HCFA to its 
contractors. In particular, some information does not flow to all parties that could benefit from it, 
established information processes are not always followed, and some communications 
responsibilities are not fully delineated. 



Barents Group LLC 18 February 9, 1998 



Comments on the consistency and coordination in communication with contractors, included: 

♦ Both HCFA CO and RO staff requested that communications paths be established to ensure 
that policy clarifications made in response to individual inquiries at HCFA CO are 
disseminated to ROs and vice versa. This type of information sharing sometimes occurs but is 
not routine and is important not only for consistency but also to avoid duplication of effort. 

♦ There are problems with consistent usage of the designated communication path between HCFA 
CO and FIs. RO, FI, and hospital interviewees noted that HCFA CO established a mechanism by 
which information flowed from HCFA CO through the RO to the FI. However, this mechanism is 
not always followed leaving various ROs and FIs to find out about missing information after it 
should have been distributed to them. HCFA should more clearly delineate the flow of information 
and the responsibilities of each type of organization in initiating communications steps. 

♦ The current system for disseminating policy and regulatory information from HCFA CO to 
hospitals involves duplication of effort in each region, which not only creates inefficiencies 
but also may contribute to inconsistencies in interpretation across regions. Hospitals 
recommended simplifying the distribution process by creating operational instructions 
centrally rather than separately at each RO and FI. 

♦ HCFA should develop specific requirements for RO oversight and interaction with hospitals 
and should define areas of accountability for the RO. This should also include standardization 
of the division of labor between ROs and state survey agencies across the country. 

♦ Each RO and HCFA contractor should be required to designate organizational contacts for 
key hospital policy and operational areas who can receive all information from HCFA and 
take responsibility for its internal distribution to appropriate personnel. FIs and ROs using this 
system found that they were better able to direct the flow of information into, within, and out 
of their operations. 

♦ HCFA should develop a more formal and frequent system for general training and ongoing 
education of RO and FI staff on regulations and policy interpretations. An important 
foundation to any training program would be the institution of training/background 
requirements for certain types of personnel. Suggestions for training methods included 
restarting 'leadership conferences' and holding regular teleconferences between FIs and ROs. 

Once clear standards and guidelines are established, and individuals are assigned responsibilities 
for key areas of policy and operational decision making, HCFA should provide this information 
to all hospitals, FIs, and ROs to facilitate appropriate communications and to direct inquiries to 
the responsible individual. 

PROs and state survey agencies urged HCFA to define consistent quality standards to be 
employed in both PRO and state survey agency work. Both types of contractors are aware of 
inconsistencies in the emphasis of PRO versus state survey agency quality standards. Hospital 
interviewees also felt that all HCFA contractors should have the same quality goals and 
emphasize the same areas for improvement. 



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Table 3: Issues of Consistency and Coordination 



General Issue 


Specific Issues 


Suggested Changes 


Hospitals report that there are 
differences in understanding 
and interpretation of policy 
and regulations among HCFA 
offices and across FI regions. 


1 . It appears to hospitals that 
the HCFA Central Office 
does not have clearly 
established standards and 
requirements that direct 
the work of Fiscal 
Intermediaries and that 
establish the 
responsibilities of 
Regional Offices. As a 
result, hospitals in 
different areas may be 
subject to different 
processes and standards. 

i 


♦ HCFA should develop clear standards and guidelines for FI operations 
and staff responsibilities, with directions for the FI to contact HCFA for 
clarification of 'gray' areas. Responsibility for developing uniform 
guidelines for all FI s in specific areas should be assigned to an , 
accountable individual in HCFA's Central Office, who would also 'be 
responsible for ensuring that new interpretations and guidelines are 
disseminated to all RO staff and to all FI staff. 

♦ The HCFA Central Office should establish a process for monitoring and 
oversight of FI activities and RO processes to ensure that consistency and 
coordination exists nationally. 

♦ HCFA should develop specific requirements for RO oversight and 
interaction with hospitals and should define areas of accountability for the 
RO. This should also include standardization of the division cf labor 
between ROs and state survey agencies across the country. 

♦ HCFA should require FIs and ROs to designate specific individuals who 
are responsible for coordinating and ensuring consistency on key policy 
and operational areas for hospitals. 

♦ HCFA should develop a more formal and more frequent system for 
training FI staff and for educating them on changes in policy and 
requirements and new interpretations of specific areas. 

♦ HCFA should restart the 'leadership conferences' and support regular 
teleconferences with ROs. 

♦ Once clear standards and guidelines are established, and individuals are 
assigned responsibilities for key areas of policy and operational 
decisionmaking, HCFA should provide this information to all hospitals, 
FIs, and ROs to facilitate appropriate communications and to direct 
inquiries to the responsible individual. 



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Februarys 1998 



General Issue 


Specific Issues 


Suggested Changes 


i 


2. PRO and RO activities 
related to quality of care 
differ across geographic 
areas and sometimes 
result in inconsistent 
direction and application 
of quality processes and 
requirements for hospitals. 


♦ HCFA's Central Office should define specific and uniform quality 
standards to be used by all PROs and state survey agencies. 

♦ HCFA should clearly define the division of responsibility between PROs 

and Regional Offices and require that ROs designate a key liaison person 

who is responsible for ensuring consistency and providing oversight to 

PRO activities. 

f 

♦ HCFA should disseminate all HCFA policy and regulatory information to 
PROs to assist them to understand issues and to clarify 'gray' areas. 




3. Because different FI audit 
teams may be assigned to 
specific hospitals each 
year, hospitals report 
inconsistencies in 
expectations and 
processes from one year to 
the next in their cost 
report and financial 
audits. 


♦ A specific FI audit team should be assigned to each hospital on a 
continuing basis to allow a consistent working relationship to be 
developed and to ensure consistency across years. 



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February 9, 1998 



Hospitals did comment that some of the variation in regional operations is necessary due to the 
different characteristics of markets in each region. For instance, interviewees encouraged HCFA 
to allow for variation in PRO relationships with their provider communities but also cautioned 
HCFA to ensure that no one type of provider is shortchanged in terms of PRO interaction and 
accessibility. 

The new organization of PRO oversight by ROs has led to some communications difficulties 
according to RO and PRO staff. HCFA should improve communication between PROs, ROs 
responsible for oversight, and other ROs not directly active in PRO oversight. All parties 
involved should at a minimum, be aware of PRO activities and regional performance 
expectations/goals. 

HCFA contractors, especially PROs, would like to receive all Medicare hospital information and 
not just that information which is specific to their line of work. A broader understanding of the 
Medicare program and HCFA's goals would help contractors coordinate with each other and be 
consistent with HCFA CO intentions. 

Hospitals raised a consistency issue regarding t^e FI audit process. One hospital remarked that it 
had done intensive work with FI auditors to develop an appropriate system for identifying and 
handling MSP situations only to be told during the next annual audit that the new system was 
insufficient and non-compliant with HCFA regulations. Several hospitals added that each 
institution spends time discussing its organizational structure and business processes with FI 
auditors before auditors are able to fully understand the cost report. This information must be 
repeated each year and any decisions made the year before may or may not be supported by the 
next audit team. Interviewees suggested that these inconsistencies could be solved if HCFA were 
to assign each hospital to a specific FI audit team that would conduct all annual cost report audits 
and focused medical reviews for that hospital. Such a system would enable hospitals and FI 
auditors to develop effective working relationships and reduce the amount of time auditors spent 
at each hospital on an annual basis. 

Simplification of Communications 

Information provided by HCFA is often difficult for hospitals to access, complex and confusing, 
or requires great effort to ensure that the information accessed is complete and up-to-date. (See 
Table 4) 

Organization of Written Information 

Interviewees noted that most HCFA publications cite or reference another publication, often 
making it difficult to find a clear answer to a specific operational question. It was suggested that 
references to other documents need to be accompanied by a short description of the relevance 
and content of the suggested source. Without such information, hospitals feel they do not have 
adequate information to decide whether the reference will be helpful in answering their specific 
questions. Hospitals encouraged HCFA to realize that providers need a certain level of detail in 
order to answer an individual question or address a specific problem, and to write publications 
that would enable providers to locate details. 



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Hospitals suggested that HCFA always repeat information needed to fully understand the broader 
policy issue and use a standardized cross-referencing system where citations are accompanied by 
enough information to determine their basic content. Standardization is an important element as 
HCFA documents evolve over time. Various publications currently contain some contradictory 
citations as a result of updating only some documents or revising the format for certain types of 
documents. Consolidating text on program areas and coverage issues would avoid the need to 
pull information scattered throughout different sections, and across various manuals, in order to 
have a complete and accurate picture of requirements. Including an annotated index by subject 
area in each manual and providing a comprehensive index across manuals for Medicare Part A, 
in general, would also assist hospitals in finding other references to the same subject matter. 

Current problems with the structure and content of HCFA manuals make use of the CD-ROM 
version difficult. Benefits of having a CD-ROM are overridden by problems in finding the 
location of information. In addition to revising HCFA manuals themselves, hospitals proposed 
the following adaptations to the CD-ROM versions of these manuals: 

♦ Add the ability to search by topic to the CD-ROM search device; 

♦ Use hypertext links to cross-reference documents and sections on the CD-ROM; and 

♦ Employ a commercial vendor to revise and maintain the CD-ROM version of the manuals. 

Hospitals suggested that HCFA consider contracting out the duty of revising and maintaining the 
CD-ROM to an established commercial vendor. Most of the interviewee comments listed above 
are at least in part derived from expectations of CD-ROM performance acquired through hospital 
experience with commercially produced CD-ROMs of HCFA materials. Most interviewees were 
familiar with such commercial products and many emphasized that commercially produced CD- 
ROMs of HCFA materials are much more user friendly than the one produced by HCFA. 

Much of the information provided to hospitals regarding the Medicare program is delivered 
through HCFA contractors. In particular, FI communications are an essential link from HCFA to 
hospitals in the delivery of operational information related to claims processing and 
reimbursement. Interviewed hospitals provided some feedback to HCFA on FI performance in 
the area of written communications. Some hospitals felt that FI communications were friendly 
and useful while others hesitated to offer praise. Some of the variation in opinion is derived from 
differences in individual FI performance and relationships with hospitals. Hospitals that were 
generally satisfied with FI communications cited a friendly tone and detailed indices as reasons 
why publications, such as FI users guides for claims and billing systems, were appreciated. 

Increasing Clarity 

Another suggestion from hospital staff focused on the difference between legal versus 
operational documents. Most hospitals expressed a need for more operational language in HCFA 
publications. These interviewees believe that some of the terminology employed in HCFA 
operational materials, though it may be appropriate from a legal standpoint, is less than helpful in 
determining the exact meaning of the operational instructions. Hospitals requested that HCFA 



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make language clearer, use simple wording, and focus explanations on ways in which policies 
and regulations affect hospital operations. 



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Table 4: Simplification of Communications 



General Issue 


Specific Issues 


Suggested Changes 


Information 
provided by HCFA 
is often difficult for 
hospitals to access, 
complex and 
confusing, or 
requires great effort 
to ensure that the 
information 
accessed is 
complete and up-to- 
date. 


1 . Information related to a 
specific issue may require 
searching several documents 
or checking in several 
' sections of a specific 
document. Hospitals have no 
way to determine whether 
they have identified all 
relevant information related 
to the topic of concern. 


♦ HCFA should develop informational materials that completely address specific 
issues in one document. Cross-references to related documents should be 
provided, but these related documents should provide background rather than 
critical information on the specific issue. These topic-specific informational : 
materials should be organized to allow up-dates to be inserted when issued and 
all informational material should contain dates to facilitate determination of 
which information is most current. 

♦ HCFA should provide indexes for Manuals and for the CD-ROM versions that 
allow hospitals to quickly ascertain all relevant sections of these materials that 
relate to specific issues of interest. 

♦ The HCFA CD-ROM should be made more 'user friendly' by including 
mechanisms for searching by topic and cross-referencing documents and 
sections. 

♦ All HCFA manuals should use a standardized system of cross-referencing. 

♦ FI user's guides for claims and billing systems should also be made more 'user 
friendly' through the addition of detailed indexes that allow hospitals to ensure 
that they have identified all relevant sections. 




2. HCFA information materials 
lack clarity and are 
sometimes confusing and 
filled with jargon that is 
difficult to interpret. 


♦ HCFA should develop explicit definitions of terminology used in Manuals and 
cost reporting guidelines and publish a Glossary of these terms. 




3. Hospitals frequently have 
difficulty identifying the 
appropriate person at the CO, 
RO, or FI to contact about 
specific topics. 


♦ HCFA should require that each FI and RO identify key contact persons for 
specific topic areas and disseminate that information to hospitals. 

♦ It would also be helpful if each FI and RO assigned a specific staff person to 
each hospital to act as a liaison and assist the hospital to reach the appropriate 
person to resolve issues and problems. 



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February 9, 1998 



- 



General Issue 


Specific Issues 


Suggested Changes 




4. HCFA information may be 
directed to different people 
within a hospital with the 
result that hospitals can not 
be sure that they have 
received all information. 
1 Hospitals that are part of 
chains may receive some 
information, while the central 
chain headquarters may 
receive other information. 


♦ HCFA's CO, RO, PRO, a. J FI offices should standardize their systems for 
sending correspondence to hospitals. Hospitals should be permitted to designate 
specific individuals within the hospital to receive different types of 
correspondence (. e.g., PRO information would be sent to the hospital's quality 
contact.) 

♦ Hospital chains should be allowed to designate a hospital-specific and corporate 
liaison to receive all communications. 

♦ HCFA should establish a regular timeframe for updating hospital contact 
information and inform hospitals in advance of this deadline to ensure that 
current and accurate contact information is maintained. 



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February 9, 1998 



For example, vague terminology both in the HCFA manual and FI bulletins appears to contribute 
to misunderstandings between hospitals and HCFA intermediaries. Words, such as "reasonable" 
and "appropriate" when used as a qualifying term in policy implementation instructions, lead to a 
wide variety of interpretations of the limits for 'hose instructions. What an FI surveyor views as 
reasonable is likely to differ from what the hospitals view as reasonable due to the different 
environments in which these individuals operate. 

In particular, hospitals would like to receive more detailed "working definitions" of terms whose 
definitions affect the way certain hospital elements are counted on cost report worksheets. 
"Working definitions" should not only include descriptions of the meaning of the term but also 
advise hospitals on how to account for circumstances that occur frequently yet fall into the "gray 
areas" of interpretation. Examples of terminology used in cost report instructions without an 
adequate "working definition" include: 

♦ Graduate medical education (GME) "1st, 2nd, and 3rd year resident" categories for which cost 
report instructions do not contain an explanation of how to account for residents who change 
status or switch programs during the HCFA fiscal year, which incorporates portions of two 
academic years; and 

♦ The types of hospital beds that can be counted as "available beds." This term is sometimes 
defined by FI auditors as synonymous to Medicare certified beds and other times not. 

As hospitals evolve into more complex organizations the cost reporting process increases in 
detail and is prone to errors. Small differences in the methodology for completing the cost report 
can translate into large changes in the payments hospitals receive. For these reasons, the cost 
report and FI cost report audit process are recognized as a crucial part of Medicare operations by 
both hospitals and HCFA. 

Identifying Contacts 

Hospitals commented that decisionmaking within the Medicare program on interpretations of 
less common policy situations is the area in which most response delays occur. When RO or 
HCFA CO consultation is required, delays can occur not only due to the time it takes to place 
calls and provide background information to additional people, but also due to problems in 
finding the right individual with the authority to make a decision. According to hospitals and 
HCFA contractors, decisionmaking could be facilitated by creating a special communication path 
for resolving less common policy interpretations. Key features of the communication path would 
be designated HCFA personnel and a defined process for specifying any time constraints. Such a 
system would also Ve more supportive and fair for HCFA employees who currently may be 
pressured to make judgment calls without the proper authority or background to do so. 

Hospitals often spend significant amounts of time trying to reach the appropriate RO or FI staff 
person who can respond to inquiries and make decisions. It would be helpful if HCFA required 
ROs and FIs to provide a list of staff who have responsibility for specific areas and issues, and 
designate experts on "hot issues." Such personnel should be able to offer policy interpretations in 
their area and work with CO on an as-needed basis to resolve difficult issues. It would also be 



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helpful if each FI and RO assigned a specific staff person to each hospital to act as a liaison and 
assist the hospital to reach the appropriate person to resolve issues and problems. 

C orrespondence 

Hospitals noted that HCFA information may be directed to different people within a hospital 
with the result that the organization can not be sure that it has received all information. Hospitals 
that are part of chains may receive some information, while the central chain headquarters may 
receive other information. HCFA's CO, RO, PRO, and FI offices should standardize their 
systems for sending correspondence to hospitals. Hospitals should be permitted to designate 
specific individuals within the hospital to receive different types of correspondence (.e.g., PRO 
information would be sent to the hospital's quality contact). Interviewees also requested that 
chain hospitals be allowed to designate a hospital specific and corporate liaison on HCFA 
communications databases. This way HCFA could carbon copy the designated liaison on all 
Medicare communications and keep both levels of the corporation adequately informed. 

HCFA communications systems also need to be updated in a timely fashion. Hospitals cited 
problems in receiving HCFA materials that were caused by out of date mailing lists. One hospital 
reported that its HCFA mailings come addressed to the hospital administrator who retired 5 years 
ago. Interviewees asked that HCFA regularly update hospital mailing lists based on the 
information hospitals give to HCFA that reflects changes in hospital leadership and new 
organizational relationships. 

Additional Information 

While HCFA makes much information available to hospitals, there is additional information 
that, if available, would help hospitals to operate more effectively and efficiently. (See Table 5) 

Hospitals receive extensive information from the Health Care Financing Administration (HCFA) 
both in terms of background knowledge for Medicare operations and of ongoing information 
concerning policy changes and new regulations. In addition to general communications, HCFA 
and contractor staff handle a wide variety of inquiries from individual hospitals. Direct 
communications center on responding to inquiries or resolving issues by providing clarifications 
or interpretations of requirements. 

This section of the report focuses on the information needs of acute care hospitals which, 
according to those hospitals, Regional Offices (ROs), fiscal intermediaries (FIs), state survey 
agencies, peer review organizations (PROs), and industry associations interviewed, are currently 
not met by HCFA and its contractors. It is possible that some of the information described in this 
chapter as missing is actually available through HCFA, its contractors, or its publications. 
However, if hospitals do not know of the availability of such information then there is an 
opportunity for improving the process for informing hospitals that the information exists and 
where/how it can be accessed. While the information needs of different types of hospitals vary, 
there are areas in which many of the hospitals and other organizations interviewed agreed that 



Barents Group LLC 28 February 9, 1998 



additional information would facilitate more efficient Medicare operations in hospitals. The 
findings for seven areas of information needs are summarized in Table 5 and elaborated below. 



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Table 5: Additional Information that Hospitals Would Like to Have Available 



General Issue 



Specific Information Requested by Hospitals 



While HCFA makes much information 
available to hospitals, there is additional 
information that, if available, would help 
hospitals to operate more effectively and 
efficiently. 



Information Related to Medicare HMOs: 



On-line access to a database that would allow hospitals to identify Medicare HMO members 
when they arrive at the hospital. 

♦ Identify to hospitals all Medicare HMOs operating in their market areas. , 

♦ Medicare HMO policies for providing emergent care 

♦ Policies that determine HMO payments to non-contracted hospitals when they provide 
services to HMO members. 

♦ Appeals procedures when a hospital has a payment dispute with a Medicare HMO. 
Information on Utilization. Outcomes, and Quality of Care 

♦ Summary statistics on utilization and outcome data for each hospital's market area, overall 
and for the individual hospital 

Information on Claims and Billing Issues 

♦ Detailed information on remittance advices that allows hospitals to determine specific 
claims that were designated as overpayments and coding for payment reductions. 

♦ Detailed description of the PPS and its use to calculate specific payments. 
Information Provided to Medicare Beneficiaries 

♦ Hospitals would like to receive copies of all general information sent by HCFA to 
Medicare beneficiaries, in order to assist beneficiaries who may have difficulty 
understanding changes in the Medicare program. 

♦ Information on the new HCFA beneficiary toll-free telephone number that could be used 
by hospitals to assist beneficiaries to obtain information. 



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February 9, 1998 



General Issue 


Specific Information Requested by Hospitals 


i 


Information Related to New Policies and Regulations 

♦ Hospitals would like to receive background information on new policies and regulations 
that clearly explain the objectives of the changes and the process through which the 
change will be implemented. 

Information on HCFA Activities and Organizational Changes 

♦ Information on conferences where HCFA staff are scheduled to discuss specific issues 

♦ Information on HCFA pilot programs and demonstrations that hospitals may want to 
participate in or may need to be aware of to assist beneficiaries to understand these 
programs. 

♦ Information on HCFA organizational structure and planned and implemented changes in 
structure. 

♦ Information on new and developing regulatory initiatives, to permit hospitals to participate 
in the process and to understand new programs. 



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February 9, 1998 



Information Related to Medicare HMOs 

Virtually all hospitals interviewed provide services to some Medicare HMO enrollees. 
Depending upon a hospital's relationships with Medicare HMOs in its area, the hospital may 
have access to a variety of HMO informaticxi or be completely unaware of the most basic 
information needed to serve HMO enrollees. Without adequate information on Medicare HMOs, 
hospitals may not be able to comply with HMO policies or to collect payment from the HMO. 
Nearly all of the hospitals interviewed requested that HCFA provide some additional information 
on Medicare HMOs. In new markets where managed care enrollment is on the rise, hospitals are 
particularly confused by the number of new plans and need extra assistance from HCFA. 
Hospitals located in more developed managed care markets must spend considerable time 
compiling plan specific information and are more likely to be part of one or more HMO provider 
networks. 

Since managed care information is dynamic during this time of rapid expansion in and changes 
to the Medicare HMO program, hospitals recommended that HCFA create an on-line database or 
interface to provide up-to-date information on Medicare HMOs and enrollment. Interviewees 
recommended that such an interface allow hospitals to: 

♦ Identify an individual as a current member of a particular Medicare HMO at the time the 
beneficiary arrives at the hospital; 

♦ Generate a list all Medicare HMOs operating within a given market area with contact 
numbers for Medicare member services and billing departments; 

♦ Obtain Medicare HMO policies, both general to the Medicare HMO program and any 
specific to the plan, for providing emergent care to beneficiaries; and 

♦ Access information on appeal procedures for hospital payment disputes with Medicare 
HMOs. 

Many hospitals expressed confusion regarding HCFA policies on HMO payments to non- 
contracted hospitals providing services to HMO members. These hospitals are unclear whether 
they are entitled to receive reimbursement for out-of-network care equivalent to standard 
Medicare fee-for-service payments. Apparently, Medicare HMOs sometimes reimburse hospitals 
for only part of the standard prospective DRG payment and may refuse attempts by the hospital 
to collect the remainder. While such HMO practices may not be condoned by Medicare HMO 
regulations, hospitals lack information on HCFA requirements and are therefore not able to 
identify when and if remaining amounts can be legally claimed. 

Information on Utilization. Outcomes, and Quality of Care 

One perception of HCFA in the hospital research community is that it has a large store of data 
and health services research information that is not made available to the public. In particular, 
hospitals would appreciate HCFA sharing utilization and outcomes information with the provider 
community. For example, Health Care Investments Analysts (HCIA) inpatient utilization data, or 
MEDPAR data, is not available to hospitals for research unless the hospital pays HCFA to 
perform a data run. Since hospitals are collecting HCIA inpatient utilization data on HCFA's 

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behalf, they feel thaLHCFA should be able to make summary statistics available to them and 
perform limited data analysis that the majority of the hospital community would find useful. 

Infc rmation on Claims and Billing Issues 

A number of hospitals interviewed noted that remittance advices do not currently provide all the 
information a hospital must have to understand how a claim was paid. Remittance advices could 
be improved by providing an adequate explanation of the coding for payment reductions, 
including: the year, the reason payment was reduced, and concise definitions of codes. This 
information is difficult to obtain when not provided on the remittance advice. Hospitals may be 
able to look up definitions of codes yet still may not have enough information on the reason the 
payment was reduced. Such information is essential to understanding and correcting staff errors. 

Additionally, hospitals requested that HCFA provide a description of the exact process by which 
Medicare hospital rates are calculated so that a hospital can use this information to calculate a 
tentative rate while completing its cost report. 

Information Provided to Medicare Beneficiaries 

Hospitals would like to receive any information disseminated to other participants in the 
Medicare program, including fiscal intermediaries and carriers, physicians, Medicare risk health 
plans, and beneficiaries. For example, receiving beneficiary communications would help 
hospitals to assist beneficiaries in understanding changes in the program and how best to access 
benefits. Some hospitals, who had heard about the new HCFA beneficiary 1-800 # encouraged 
HCFA to disseminate information on the new toll free beneficiary service line to hospitals so 
they can include it in their outreach activities. 

Information Related to New Policies and Regulations 

Almost all interviewees noted that by including more detailed information in the original 
publication of regulations HCFA could reduce both the number of clarifications sought by 
hospitals and the amount of variation in interpretation of regulations by hospitals and HCFA 
contractors. Information at the level of detail necessary for operationalizing policy is currently 
not provided proactively from HCFA to hospitals, but instead is created by FIs and ROs in 
response to individual inquiries. In particular, some interpretations are only included in FI audit 
guidelines or in HCFA memoranda, both of which are not released to hospitals. HCFA's 
interpretation of OBRA regulations for Medicare SNF bed certification is one example cited by 
interviewees. Currently, much of this information is contained in internal policy memos which 
are believed by some interviewees to be contradictory to the policy interpretations enforced by 
state survey agencies responsible for certifying SNF beds. 

Hospitals suggested that Medicare regulations could provide better operational guidance to 
hospitals if HCFA were to include the following additional detailed information: 

♦ Discussions of the intention behind new legislation and policy to help hospitals and 
intermediary personnel preserve the meaning of regulations as they interpret the way policies 
affect their particular operations; and 

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♦ Simple "how tcT directions for operationalizing policy with explanations of how hospital 
operational performance of the regulation will be evaluated. 

Without detailed operational information on new policies, hospitals may not understand how to 
comply with regulations or may misinterpret the intention behind regulations. These deficiencies 
can lead to uncertainty for hospital personnel who do not know if hospital operations are in 
compliance with HCFA regulations and fear that they may face fraud/abuse charges due to 
misunderstandings. 

Information on HCFA Activities and Organizational Changes 

Hospitals, as well as other interviewed groups, would also like to be better informed of HCFA 
activities and initiatives. This would not only assist hospitals in preparing for change, but would 
also provide hospitals with information that could be shared with beneficiaries. Interviewees 
indicated that HCFA has numerous initiatives underway, and it would oe helpful to receive 
information on their status. In particular, hospitals would like the opportunity to apply to 
participate in HCFA demonstration and pilot projects. Some examples of hospital remarks 
inclvde: 

♦ HCFA recently started a pilot program in New York State to investigate new ways of 
structuring GME payments to hospitals. All of the teaching hospitals and AMCs interviewed 
asked to receive more information on the structure of the program and wanted to know how 
HCFA had chosen the location and hospitals for the pilot; 

♦ Hospitals are unclear how HCFA intends to proceed with implementing the proposed new 
Medicare Transaction System. Originally, hospitals expected HCFA to create a new claims 
processing system but now the Agency is requiring all hospitals to use the Florida Shared 
System. Some interviewees believe that switching to the Florida Shared System is 
unwarranted given the amount of time it will take to make the transition and the uncertain 
rewards of doing so. They would like to know if another system will be implemented later or 
if HCFA has plans to improve the Florida Shared System; 

♦ Hospitals have not heard of the results of the FI Audit Process Medicare Technical Advisory 
Group (MTAG) survey which they were asked to complete some time ago. A few hospitals 
interviewed reported having seen the list of conclusions from the overall MTAG and HCFA 
effort to redo the FI audit process. None of the hospitals we spoke with were aware of the 
implementation of any recommendations from this initiative; and 

♦ Hospitals are currently seeking information and updates on the HCFA reorganization. 

It would also assist hospitals if HCFA were to regularly provide information on its organizational 
structure of the Agency and key contacts within HCFA by operational and/or topical area, with e- 
mail addresses and telephone numbers. This would enable hospitals to communicate more 
effectively with appropriate HCFA staff. Many interviewees indicated that this information is 
mostly acquired through personal contacts and should be made more widely available. Some 
hospitals indicated the need to know when their key HCFA staff contacts are going to be out of 
the office, such as changing their voice mails to indicate the length of their absence and, just as 
critical, identifying an appropriate back-up person in their absence. Hospitals would also like 

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information on the conferences where HCFA staff are scheduled to speak and the specific issues 
that they will be addressing. 

Information Dissemination 

HCFA and FIs currently communicate with hospitals through a number of different strategies. 
Hospitals suggested several additional strategies that would increase the effectiveness of 
information dissemination and meet the needs of different types of hospitals. (See Table 6) 

HCFA provides a large amount of information to hospitals, using a number of different 
communication methods. These include: 

♦ Written materials, 

♦ Verbal communication, by telephone and in-person, 

♦ HCFA Web Site, 

♦ E-mail and electronic data transfers, and 

♦ Conferences and training. 

Hospitals and other interviewees were asked about communications strategies that would be most 
effective for HCFA to use to improve information flow and communication to improve the 
process and assist the hospitals and HCFA to work more smoothly and efficiently. While 
effective communication strategies may differ for hospitals with different characteristics, all of 
the hospitals had suggestions for changes in communication strategies that they believed would 
improve the process. Table 6 summarizes the major recommendations made by those who were 
interviewed during this project. 

The consensus among the hospitals and others that were interviewed is that HCFA currently 
employs some effective communication strategies and that hospitals could obtain most 
information that is essential for effective operations of a hospital. The suggestions that were 
provided would expand the use of some types of communication strategies, diversify the 
strategies used to convey some types of information, and make certain specialized information 
more accessible to the hospitals that need it most. Since hospitals have different methods of 
internal communication based upon their organizational characteristics, offering information 
through multiple communication methods would increase the ability of all hospitals to obtain 
information and work effectively with HCFA. 



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Table 6: Information Dissemination 



Genera! Issue 


Specific Suggestions 


HCFA and FIs currently 
communicate with hospitals 
through a number of different 
strategies. Hospitals suggested 
several additional strategies that 
would increase the 
effectiveness of information 
dissemination and meet the 
needs of different types of 
hospitals. 


Training Sessions and Materials: 

♦ Develop telephone training sessions on specific topics. These are offered by some FIs, are useful, 
and offer hospitals the opportunity to raise hcspital-specific issues. In addition, these training 
sessions are easier to participate in than are in-person workshops and conferences, particularly 
for small and rural hospitals. 

♦ Prepare short videocassette presentations to assist hospitals in understanding complex Medicare 
issues (e.g. a video on the 72-Hour Rule, with descriptions and clear examples of how these 
regulations apply to emergency room staff). 

♦ Distribute computerized training sessions on diskettes, for specific topics. 

♦ Offer tutorials as a component of current systems to help users understand processes (e.g., as part 
of the claims filing system). 

♦ Offer more FI workshops on basic Medicare and as background for major policy changes. While 
these are offered currently by some FIs and on some topics, a more fully developed prog; n on a 
regular schedule in all areas would be helpful to many hospitals. 

On-Line Communications: 

♦ In general, hospitals would like to see HCFA and the FIs provide more information on-line and 
to have on-line information updated on a regular schedule. 

♦ Hospitals would like to have interactive, on-line communication with HCFA and FIs, where they 
could ask questions and provide training for hospital personnel. 

♦ It would be useful for HCFA to develop listservs, e-mail news groups where members and the 
listserv administrator could post messages. This would allow hospitals to subscribe to specific 
types of information based on the characteristics of their organization. 



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General Issue 


Specific Suggestions 


■ 


Written Communications: 

♦ Publish a HCFA-sponsored newsletter that includes discussion of upcoming policy changes, 
HCFA initiatives, and other HCFA activities of interest to hospitals would be helpful. While 
there are a number of private newsletters, the information provided in them is often inaccurate 
and hospitals would prefer to receive information directly from HCFA. 

♦ HCFA should create FAQ (frequently asked questions) fact sheets on specific issues and hew 
policies and distribute them to FIs, ROs, and directly to hospitals on a regular basis. 

Telephone: 

♦ HCFA should offer a national "update hotline," similar to those offered by some FIs, so that 
hospitals can call and obtain information on 'hot' issues and recent changes in policy. 

♦ HCFA should publish a directory of individual hospitals that ROs and FIs should call in the 
Central Office for various types of information, including designated experts is ^necific 
operational and policy areas. 

Targeted Information Dissemination: 

♦ Hospitals should be able to specify topics that they would like to receive information on and 
HCFA should then target information dissemination by topic to specific hospitals. 



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Consultations with the Hospital Industry 

Hospitals would like to have increased involvement in development of policy and new 
regulations, as well as participating in joint i forts with HCFA to improve operations of the 
Medicare program. (See Table 7) 

Hospitals suggested that HCFA work more closely with individuals in the industry to incorporate 
operational knowledge and perspectives into both the development of policy and the 
improvement of the Medicare program operations. Increased collaboration with the hospital 
industry could be achieved both at the national and local levels. 

As in many industries, health care providers are constantly evolving structurally and utilizing 
more advanced technologies in order to maintain their competitiveness. In general, hospital and 
contractor staff felt that HCFA does not understand the pace of structural and technological 
change within industry, the operational issues and constraints faced by hospitals and 
intermediaries, and the time needed to implement changes in operational procedures and 
information systems. Hospitals made the following suggestions to improve HCFA's ability to 
kee, pace with industry and anticipate the operational impacts of changes in policy: 

♦ Involve industry experts in the design and implementation of policy initiatives so as to harness 
capabilities already possessed by commercial entities and accurately assess the impacts of 
policies prior to implementation. HCFA could re-establish its use of Technical Advisory 
Groups (TAGs) during the development and implementation to incorporate industry expertise 
into the developmental phase, save time, and avoid potential implementation obstacles. It is 
imperative that HCFA design and implement policy initiatives quickly before technology 
becomes out of date. For example, hospitals suggested that if the Medicare Transaction 
System (MTS) had built upon systems and technology already available in commercial 
markets then the initiative would not have been so delayed; and 

♦ Monitor and respond to operational and structural changes in industry that may diminish the 
effectiveness and intended effects of HCFA policies and regulations. Hospitals emphasized 
the importance of adapting regulations to new market structures and conditions of the industry 
before such regulations inhibit market evolution and innovation. This could be accomplished 
by maintaining contact with industry leaders to assess future directions. A current example 
cited by hospitals is the inability of Medicare regulations to provide guidance across the 
continuum of care that has developed in the hospital industry from acute to subacute to home 
health and the new financial relationships between different types of providers. HCFA should 
develop communication mechanisms for keeping industry and individual hospitals informed 
of progress and schedules for new initiatives and opportunities for hospitals to provide input. 

At a more local level, hospitals urged HCFA and its contractors to form closer and more 
collaborative working relationships with the hospital industry. Some specific suggestions are 
listed in Table 7. 



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Table 7: Consultations with the Hospital Industry 



General Issue 


SpeHfic Issues 


Hospitals would like to have 
increased involvement in 
development of policy and new 
regulations, as well as participating in 
joint efforts with HCFA to improve 
operations of the Medicare program. 


Consultation on Policv and Regulation Development: 

♦ HCFA should re-establish it use of Technical Advisory Groups (TAGs) during the development 
and implementation of new regulations as a mechanism for assessing the impact of changes in 

policy. 

' i 

♦ HCFA should develop communication mechanisms for keeping the industry and individual 
hospitals informed of progress and schedules for new regulatory and policy initiatives and 
opportunities for hospitals to comment and provide input. 

Foster Closer and More Collaborative Working Relationships with the Industry. 


♦ HCFA should encourage PROs to form relationships with the hospital industry in each State in 
order to ensure that PROs involve the industry in development and implementation of programs. 

♦ HCFA should encourage FIs to work closely with the hospital industry in each geographic region 
(e.g. FIs could participate in state and local health care councils and hospital meetings.^ 

♦ HCFA should encourage Regional Office staff to participate in local hospital industry conferences, 
including speaking at meetings on new policies and other special topics of current interest to 
hospitals. 

♦ HCFA should partner with state hospital associations and other local groups to offer workshops on 
new policy and regulatory issues. 



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APPENDIX A 

SUMMARY OF 
HOSPITAL ADVISORY PANEL MEETING 



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HCFA Market Research for Providers and Other Partners 

Hospital Module 

First Advisory Panel Meeting 

February 6, 1997; 9:30 a.m. - 3:00 p.m. 



Meeting Participants By Organization 



Panel Members 

S. Ray Coffey 
Mary Elina Ferris 
Linda Magno 
Paul Rosenfeld 
Margaret VanAmringe 



HCFA 

Charles R. Booth 
Vijaya A. Chilton 
Steven B. Clauser 
Joyce G. Somsak 
Sherry A. Terrell 



Barents/Westat/ 
Project HOPE 

Jo Ann Lamphere 
Laura Esslinger 
W. Sherman Edwards 
Helen Gelband 
Garrett Moran 
Tami Mark 
Steve Parente 



Consultants 

Sharyn Sutton 
Ray D. Sweeney 



The Hospital Advisory Panel meeting began with an overview of HCFA initiatives to improve 
communications and a description of objectives of the "Market Research for Providers and Other 
Partners" project. Health Care Financing Administration (HCFA) representatives emphasized the 
importance of understanding the information needs of hospitals and developing effective 
communication strategies that would meet those needs. The role of the Advisory Panel was 
discussed and the schedule of future activities for the project was laid out. 

General Comments 

♦ HCFA has some trouble communicating to hospitals in part as a consequence of mutual 
wariness between hospitals and HCFA due to the agency's regulatory role. While it is true 
that HCFA could improve communications by partnering with and creating new linkages 
with hospitals, it would be difficult for most hospitals to view HCFA as a partner at this point 
in time. Most hospitals view HCFA as an adversary: "HCFA is suspicious of hospitals and 
hospitals are suspicious of HCFA." There are areas where the structure of the Medicare 
program places HCFA in an adversarial relationship with hospitals, such as with cost 
disallowances and where HCFA's enforcement of regulations is at odds with hospital 
interpretation. Also, HCFA and hospitals experience a communication disconnect between 
policy development, dissemination, and implementation. The agency's history is one of 
policy decisions being made with limited opportunity for feedback from the provider 
community and transmitted to providers without strategies for effective implementation or 
feedback. 

♦ Hospitals could view HCFA as more than simply a policy and regulatory body. HCFA could 
be an information broker, a purchaser, and an educator, as well. "Partnering" between HCFA 
and hospitals should be based on shared values-quality care, beneficiary/customer 
satisfaction, and cost control. 



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Inventory tasks should be subdivided into major subject areas because communications 
issues vary significantly based on the operational area in question. Hospital operational areas 
such as finance and quality have very few common information needs and may require 
different communications strategies. Once categories are identified, project staff can focus 
inquiries towards the different types of hospital personnel within each operational area. 
HCFA will need to determine what information is needed in each category and who can best 
deliver this information. Suggested categories included: 



General Communication 

Fraud and Abuse 

Legal and Regulatory Issues 

Claims Processing and Billing 

Reimbursement 

Audits 

Cost Reporting 



Survey and Certification 

Quality Assurance and Technical Denials 

Benefits and Managed Care 

Data Requirements 

Beneficiary Services 

Medical Records 

CEO/CFO/Administration 



Literature Review 

♦ hCFA should evaluate its current policy communications tools, such as memoranda, the 
Code of Federal Regulations (CFR), and the Federal Register. According to the Advisory 
Panel members, these publications may or may not serve the majority of an individual 
hospital's information needs. There could be better ways of distributing policy information 
than those currently used. An inventory of current communications should ask: 

What information is missing from existing communications? 

What is wrong with the methods and processes of existing communications tools? 

Interview and Site Visit Component 

♦ Types of organizations and individuals to include in telephone interviews: 



Associations 

State survey and certification agencies 

Hospitals 

Academic medical centers 

HCFA Regional Offices (ROs) 



Accrediting bodies 

Consultants/Accountants 

Post-acute care facilities 

Peer Review Organizations (PROs) 

Fiscal Intermediaries (FIs) 



Teaching hospitals and academic medical centers should be included in the interview and/or 
site visit components of the project because these organizations have specialized information 
needs. A recent "hot topic" in hospital communication with HCFA involves FI interpretation 
of billing regulations for teaching hospitals. 

The post-acute care continuum should be included in the inventory since it has specialized 
needs and impacts hospitals' care of Medicare beneficiaries. Communication between 
hospitals and HCFA about post-acute care issues is poor. HCFA needs to acknowledge the 
connections between post-acute care facilities and hospitals, namely that these facilities may 
be owned by hospitals or integrated into a health system with hospitals. For instance, HCFA 



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has convened meetings with home health care agencies, nursing homes, long term care 
facilities, etc. without inviting the American Hospital Association (AHA) to attend. 

♦ Suggestions of organizations to interview: 

American Association of Hospital Attorneys 

National Health Lawyers Association (NHLA) 

American Bar Association 

Medical lawyers 

American Health Information Management Association (AHIMA) 

Consultants 

Veterans Administration, hospital system 

American Osteopathic Association (AOA) 

Joint Commission on Accreditation of Healthcare Organizations (JCAHO) 

Public Health Service, Office of Rural Health Policy 

Volunteer Hospitals of America 

University Hospital Consortium 

Catholic Health Care West or other regional hospital systems 

American Healthcare Quality Association (AHQA) 

♦ Suggested questions for interviews: 

What was the last communication you made with HCFA where you did not get a 

satisfactory response? 
What inquiries would you like to make which you do not even bother making or are 

unsure to whom you should address? 
What sources of information do you refer to? 
How useful are current HCFA communications? What existing HCFA 

communications mechanisms do you find most helpful? most efficient? 
Determine whether there are any existing mechanisms of which interviewees are not 

aware. 
What is your view of HCFA Regional Offices (RO) and Central Office (CO), and of 

FIs? 
Where can HCFA have some immediate successes with improving communications? 
What communications mechanisms would you like to use, i.e. how would your 

organization like to communicate with HCFA? 
How do you internally disseminate Medicare information received by your 

organization? 

♦ Panel members did not feel that the number of beds in a hospital should be a major factor in 
the selection process for hospital site visits. Rather, they suggested that whether a hospital is 
part of a system or network is more important than the size of the individual hospital in 
determining their information needs and shaping their communications structures. An 
interview with a health system could help capture the different needs associated with various 
types of hospitals. In addition, members agreed that interviews should cover a diversity of 
hospitals by including variation in such characteristics as: specialties, teaching status, 
regions, urban/rural environments, and whether the hospital does its own billing. 



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♦ Site visits mayjlso need to address communications issues specific to specialty hospitals. 
These issues can be identified through phone interviews with specialty associations. 

♦ When selecting which ROs and FIs to visit, project staff could seek input from HCFA 
regarding the strength and weaknesses of ach office's and intermediary's performance. 
Panel members commented that the quality of service delivered by the individual ROs/FIs 
varies greatly. 

♦ Protocols for telephone interviews and site visits should be distributed to interviewees in 
advance of the actual interview so that participants can be prepared to discuss the issues. 

Focus Groups 

♦ Panel members proposed that the four types of focus groups should be conducted with four 
types of hospital personnel (representative of different operational areas) rather than with 
four types of hospitals. Operational areas discussed included: finance, quality, coding/data, 
law, managed care, and beneficiary communication. The panel unanimously agreed that 
focus groups separating hospital staff by functional area would promote more interactive 
discussion and provide project staff with more in depth information. 

♦ Focus groups could address regional inconsistencies by including RO and FI staff. A 
teleconference with HCFA Regional Administrators could also be used to gather information 
on regional inconsistencies. 

♦ FIs, PROs, and accreditation bodies provide information to hospitals and all need information 
from HCFA. Separate focus groups could be used to examine the needs of these 
organizations through whom HCFA indirectly communicates to hospitals. 

♦ Suggestions of places to hold focus groups where a variety of hospital personnel gather: 

Regional Association Meetings (pull different levels and types of hospital personnel 

together at different times, i.e. billing personnel separate from CEOs) 
Healthcare Financial Management Association (HFMA) chapter meetings or HFMA 

National Meeting in June (FI and RO personnel; business managers, clerks, CFOs, 

and data entry specialists from hospitals) 
JCAHO meetings (hospital risk managers, medical directors, and quality 

improvement personnel; host monthly meetings on different subject areas) 
National Health Lawyers Association (NHLA) National Meeting in April (health and 

medical lawyers; deal with fraud/abuse, liability, regulation, risk management, and 

compliance issues) 
Bureau of Program Operations (BPO) audit conferences (FI audit staff) 
Fiscal Intermediary Groups' regular meetings at HCFA CO 

Provider Survey 

♦ Panel members suggested conducting a survey on-line by setting up a web page with an 
electronic form. 

♦ Before doing a survey by mail, project staff would need to identify hospital contacts who can 
take responsibility for internally facilitating the completion of the survey by individuals 

Barents Group LLC 44 April 16, 1998 



throughout the organization. This process of identifying individuals "in the loop" could only 
be done for a small sample. 

♦ Panel members encouraged project staff to decide whether to conduct a survey based on the 
results from the focus groups. 

♦ A survey would allow research to quantify and validate conclusions from the rest of the 
project. 

♦ HCFA should consider doing a survey only after it has assimilated information from this 
project and are looking to design and test new communications strategies. 

♦ The survey for this project could not "piggy-back" on the AHA annual survey because AHA 
is cutting back on its survey efforts and could not at this point expand its annual survey. 

♦ It is possible that the answers to questions this project is asking are not quantifiable and that a 
survey would not significantly enhance or validate qualitative results from other phases of the 
project. 

Communications Issues 

Communication From Hospitals to HCFA 

♦ Currently, the most valuable communications hospitals have with HCFA are made through 
individual contacts with HCFA staff members. The established communication strategy for 
hospitals is contacting "who you know." As information flow has become more complex, 
hospitals and HCFA both have recognized that communication reform is necessary. In 
addition, this informal system of communication places organizations without contacts at a 
significant disadvantage. Start-up organizations have particular difficulty identifying the right 
people to talk to within HCFA. 

♦ Whether a hospital approaches the RO, the FI, or HCFA CO depends upon the nature of the 
inquiry: 

Routine billing and reimbursement questions are addressed by the FI; and 
Unusual inquiries are handled by the RO which may defer to HCFA CO; and 
Clarification on inconsistencies or interpretations are addressed by HCFA CO. 

♦ A hospital will approach HCFA CO directly when it is on a quest for consistency, such as 
instances where a hospital is cited for breaking regulations even though the hospital believes 
it followed written regulations or when a hospital receives different interpretations of the 
same regulation. In these cases, hospitals feel the need to go back to the individuals who 
created the policy in order to feel secure about answers received. Corporate chains and 
associations especially need to receive consistent answers to policy questions on which they 
can rely. 

♦ Providers will only use communications methods through which they get timely responses. 
This means that HCFA should have different communication methods depending on the kind 
of information that is needed and its priority. Some issues are so important that hospitals 



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cannot wait for an answer. In these cases, such as license-threatening violations, HCFA needs 
to have a system that can make front-line policy determinations. 

♦ A la k of front-lfae knowledge makes it di'^icult for HCFA staff to understand policy and 
operational issues from a hospital's point of view. Said one hospital representative, "While 
HCFA debates policy, life goes on and people are admitted to the hospital each new day. We 
experience an urgency in problem resolution that HCFA doesn't understand." 

♦ Hospitals need a knowledgeable HCFA contact with whom they can develop a relationship 
and from whom they can receive consistent information. Currently, there are inconsistencies 
and disagreements in answers provided at the regional level (RO and FI) versus the national 
level. Many HCFA and FI staff members are not adequately informed of policies or properly 
trained to handle inquiries. As a result, many inquiries hit a bottleneck at the RO level till 
they are forwarded to HCFA CO. Creating a customer service directory with HCFA contacts 
listed by topical issue/operational area would facilitate hospital personnel directing inquiries 
to individuals who are able to answer their questions. This would prevent ROs from needing 
to direct/forward unanswered inquiries to HCFA CO. Furthermore, since all inquiries dealing 
with a particular subject would be addressed in the same area of HCFA, inconsistencies in 
answers could be reduced. 

Communication From HCFA to Hospitals 

♦ Poor intra-HCFA communication is the most serious problem providers face. Inconsistencies 
are created when policy must go through so many steps before reaching those who enforce it. 
Policies are incorporated in manuals from which instructions are generated for HCFA staff to 
use in interpreting individual situations. Therefore, there are three levels of interpretation 
before HCFA decides if providers are in compliance with regulations. The final interpretation 
of policy may not match the intent of the policymakers themselves. 

♦ HCFA needs to develop a timely and consistent process for solving interpretation problems 
which it was not able to proactively avoid. 

♦ HCFA often deals with the same issue or problem many times over in different locations 
rather than creating a solution or reaching a decision once, and then adopting it throughout 
the country. Once decisions are made, they should be "memorialized." HCFA needs to be 
careful not to go overboard with this suggestion. If every answer were to be repeated 
nationally then there would be a tendency to push all interpretations and clarifications to top 
levels of personnel. 

♦ Much direct communication from HCFA is not received by the appropriate individual within 
each hospital. Identifying the proper individuals to receive various types of communications 
would improve the speed of information dissemination. More than one contact is needed at 
each hospital due to the variety of information/issues addressed in HCFA communications. 
The CEO or CFO cannot be expected to disseminate information throughout the 
organization. If HCFA wants to stick with a primary contact then it should be someone who 
is designated as the one individual who is responsible for and has knowledge of how to 
properly disseminate the information. 



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♦ Hospitals are often unclear from whom they will receive information because HCFA may use 
direct or indirect communication methods. For example, during the Cooperative 
Cardiovascular Project results were se-'t out to hospitals through PROs. On other occasions, 
HCFA has sent the same type of information directly to hospitals. Panel members were in 
agreement that such information should be distributed through PROs because those 
organizations have already identified the appropriate contacts within hospitals to receive it. 

♦ Associations assume much of the responsibility for regular communications of HCFA news. 
Groups such as AHA communicate daily with hospital CEOs via broadcast faxes addressing 
"hot" issues. These groups also facilitate the flow of information from hospitals to HCFA by 
alerting HCFA to problems, emerging issues, and questions their members have. AHA has 
regional meetings with HCFA where collaborative agreements are developed, new issues are 
introduced, and existing policies are clarified. State associations are also involved in 
facilitating communication with HCFA in similar ways. 

♦ A wide disparity among fiscal intermediaries (FIs) exists in terms of timeliness and quality of 
service. Furthermore, FIs do not always agree with each other or support one another's 
decisions. This lack of consistency is a barrier to the proper functioning of indirect 
communications hospitals make with HCFA through FIs. improvements could be made 
through better training of FI (and RO) staff concerning major or sensitive regulatory changes. 

♦ PROs and deemed accreditation organizations (JCAHO and AOA) should work together to 
direct quality initiatives and goals within the hospital industry. 

General Comments 

♦ If HCFA commits to reform communications then it will need to follow through by actually 
delivering customer service. If hospitals contact HCFA and do not receive a response then 
they will write-off HCFA's desires to build communication as "lip service." In the past, 
HCFA has set up new systems which are not followed and, therefore, dry up and disappear. 

♦ There is no single perfect communication strategy; different types of communication are 
necessary in order to connect with a variety of providers. At the same time, information 
provided by HCFA about Medicare needs to be consistent across all types of communications 
and through all points of contact. Workgroups may be an effective communication strategy 
for the implementation of new regulations. 

Information Needs and Suggested Communications Strategies 

♦ Hospitals would like HCFA to make more data available to them free of charge and in a user 
friendly format so that they do not have to buy HCFA data from consultants. For example, 
Medicare fee schedules need to include county designations so the user can do 
conversions/calculations. 

♦ HCFA should develop a "best practices" guide for hospitals with detailed information on 
which practices are helpful for Medicare operations. 



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♦ Hospitals need more information on Medicare managed care. HMO benefits and standards of 
quality are very different than those in fee-for-service (FFS) Medicare. Panel members 
suggested that in'the long run HCFA could help standardize utilization review practices and 
goals. In the short run, HCFA could facilitate interaction between their various types of 
partners, enabling these partners to communicate differences in standards. 

♦ HCFA should recognize that HMOs and hospitals do have interests in some of the same 
issues, including: beneficiary communications, quality of care, customer service, cost- 
effective care, best practices, data sources, and comparative pricing data. 

♦ HCFA could develop its role as an educator by creating linkages to other areas of Department 
of Health and Human Services (DHHS) and to other data systems. 

♦ Working groups have helped hospital staff see issues from HCFA's point of view. They also 
help HCFA see the gaps between policy and reality. 

♦ HCFA could offer a customer-friendly l-800# for providers with a guaranteed follow-up 
system. This toll free number could serve as a clearinghouse and refer callers to the proper 
individuals to answer their questions. However, not all Medicare information can be provided 
at the national level. Hospitals need the operational and technical support of ROs to deal with 
regional issues. 

♦ HCFA should continue to expand its on-line sources of information and to track "hits" as a 
source of feedback on the usefulness of various pieces of information provided on-line. It 
would be helpful to create a table of contents on the HCFA web page of the most common 
issues raised by hospitals. That way, hospitals would be able to access answers to common 
questions and information on "hot issues" without searching through the many pages of on- 
line material. 

♦ On-line communication cannot replace written communication, particularly in the case of 
legal and regulatory issues. HCFA should reevaluate the types of communication it delivers 
on paper to prioritize pieces that are critical and to redo the format of any written 
communications that are not user friendly. 

♦ HCFA should publish the Internet addresses of staff with whom hospital personnel are in 
contact. 

♦ Improved communication linkages between HCFA bureaus and other entities, such as the 
Department of Justice, should be fostered. 

Conclusion 

The Hospital Advisory Panel shared the perspective that more collaboration exists between 
HCFA and hospitals now than in the past with respect to the development of public policy 
affecting the hospital industry. Panel members also agreed that a partnership has formed between 
the public and private sector in the policymaking process. The Panel was less certain of the 
meaning of partnership as it relates to policy dissemination and the day-to-day operations of 
hospitals and the federal government. Asked one Advisory Panel member, "are we still good 
partners if you disallow our costs?" Another member emphasized the opportunity for enhanced 



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communication between hospitals and HCFA in areas where values are shared, such as quality 
care for beneficiaries, cost-effective care, and commitment to quality in the delivery of customer 
services. 



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APPENDIX B 
METHODS 



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APPENDIX B 

P 'ETHODS 

The activities under this project define the current information needs of hospitals and their 
common communication issues with HCFA. The multiple dimensions of hospitals as providers 
of care and as an important source of infonnation to beneficiaries and also physicians are 
considered. This project examined hospitals' needs for different kinds of information, such as that 
related to reimbursement and quality care, and how existing communication patterns enhance or 
detract from the effective delivery of care to Medicare beneficiaries. 

Under the "Market Research for Beneficiaries" project, the Barents Group team interviewed 
large private employers, senior groups, and managed care companies to identify innovative 
communication strategies that are used to reach beneficiaries. The findings on the information 
needs of Medicare beneficiaries are also relevant for identifying some of the information needs 
of hospitals because these entities need up-to-date knowledge to address question of patients 
about health care and to assist them in utilizing Medicare services in many settings. 

Advisory Panel Meeting 

An Advisory Panel of industry representatives was established to guide key decision making 
points of the project. Prior to beginning the hospital market research, a Panel meeting was 
convened on February 6, 1997. This Panel provided advice and guidance early in the inventory 
component of the project and recommended potential choices for site visits. A summary of the 
information provided to the project by Advisory Panel is contained in Appendix A to this report. 

Several categories of expertise were sought from the panel, including: senior hospital executives 
who interact with HCFA; a representative of the American Hospital Association (AHA) who 
communicates with HCFA and assists hospitals in understanding HCFA rules and regulations; 
and representatives from a Peer Review Organization (PRO) and the Joint Commission on 
Accreditation of Healthcare Organizations (JCAHO) who have an understanding of the 
communications strategies used to convey quality improvement information and regulations. 

The following individuals are members of the Hospital Advisory Panel: 

♦ Ray Coffey, National Director and Assistant Vice President of Health Financing Resources, 
Quorum Health Group, Inc.; 

♦ Steven Cole, Vice President for Health Financing and Research, Federation of American 
Health Systems; 

♦ Mary Ellina Ferris, M.D., Medicare Director for Southern California and Associate Clinical 
Coordinator, California Medical Review, Inc.; 

♦ Tom Johnson, Vice President for Reimbursement, Columbia/HCA Healthcare Corporation; 



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♦ Paul Rosenfjeld^Executive Vice President for Special Populations and Continuing Care, 
Sisters of Charity Health System; 

♦ Margaret Van Amringe, Director of Federal 1" elations, Joint Commission on Accreditation of 
Healthcare Organizations; and, 

♦ Linda Magno, Policy Development, American Hospital Association. 

In addition, two individuals agreed to serve as consultants to the project: Stephen M. Shortell 
from the Kellogg School of Management and Raymond Sweeney from the Hospital Association 
of New York State (HANYS). 

Review of HCFA Materials and Communication Metho ds 

The literature review for the Hospital Module had several components: a review of materials 
provided to hospitals about Medicare, such as notices in the Federal Register of changes in 
payment policy, billing practices, and anti-fraud regulations; and, a focused review of 
information provided by fiscal intermediaries and hospital associations and the role of these 
associations as intermediaries between HCFA ard the hospital sector. Appendix C describes the 
literature search and review methodology used for this project. 

The review of communications methods began on January 29, 1997 when project staff met with 
HCFA officials to learn from the HCFA perspective what information is provided and how 
communication with hospitals works. The initial overview meeting with HCFA staff from 
various bureaus helped project staff obtain a thorough understanding of these communications, to 
identify HCFA staff for further contact, and to identify outside entities to contact for more 
information. 

Telephone Interviews 

Telephone interviews were conducted with a number of organizations and individuals to obtain 
background information to structure the subsequent site visits. Principal types of organizations 
contacted included: organizations representing hospitals (e.g., the American Hospital 
Association); associations representing hospital professionals, such as administrators and 
attorneys (e.g., the American Academy of Hospital Attorneys and the Healthcare Financial 
Management Association); key personnel in hospitals (e.g., administrators and finance 
personnel); peer review organizations; and state survey and certification agencies. Telephone 
interviews with staff from several HCFA Regional Offices were also conducted to document 
their interactions with hospitals, intermediaries, and HCFA CO. 

Site Visits 

Using information from the Hospital Panel, the preliminary literature review, and telephone 
interviews, detailed interview guides were prepared for site visits to hospitals in Atlanta, 
Chicago, and San Francisco (see Appendix VII-A). The site visits identified information needs 
and effective mechanisms for communicating with subsets of hospitals with unique information 
needs. Organizational characteristics considered in the site selection process included: types of 
hospitals, including voluntary, proprietary, or government, chain or independent, teaching status, 



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and location (urban or rural). Advisory Panel members suggested that whether a hospital is part 
of a system or network is more important than the size of the individual hospital in determining 
their information needs and shaping their communications structures. They added that, because 
quality of service delivered by individual HCFA Regional Offices and fiscal intermediates varies 
greatly, site visits to different ROs and FIs should be sought. 

In addition to one interview with a fiscal intermediary in the Washington, DC area and a rural 
hospital in South Dakota, site visits were conducted in: Atlanta, Georgia (March 1 1 to 12, 1997); 
Chicago, Illinois (March 17 to 18, 1997); and San Francisco, California (March 19 to 20, 1997). 

Information was collected on information needs and communication strategies for the following 
categories of organizations: 

Table B-l: Interviews and Site Visits 



Organization 


Number 


HCFA Regional Offices 


4 


Hospitals 


14 


Fiscal Intermediaries 


2 


Industry Associations 


7 


Peer Review Organizations 


3 


State Survey Agencies 


3 


Table B-2: Characteristics of Hospitals Interviewed and Visited 


Characteristic of Hospital 


Number 


Public 


3 


Private Chain 


5 


Private Independent 


6 


Voluntary 


8 


For-Profit 


6 


Academic Medical Center 


3 


Other teaching 


5 


Non-Teaching 


6 


Urban 


11 


Rural 


3 


Total 


14 



Focus Groups 

Focus groups were conducted with hospital finance and FI personnel in several areas of the 
country. Discussion guides were developed to gather additional information on issues raised 
during the Hospital Advisory Panel meeting, literature review, telephone interviews, and site 
visits. During the focus groups, participants were asked to share their views and experiences on a 



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list of topics identified as areas where additional information or clarification on hospital and FI 
viewpoints would be helpful in further defining the findings of the hospital market research. 



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APPENDIX C 
LITERATURE REVIEW 



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APPENDIX C 

APPROACH TO REVIE V OF THE LITERATURE 

A large number of information sources were scieened as background to preparing the Hospital 
Inventory and to guide the development of the Interview and Site Visit Protocols for this project. 
These information sources included: 

♦ Data bases, including MEDLARS and LEXUS NEXUS, were searched to identify literature 
and information sources on Hospital contracting/accreditation, information, communication, 
and application processes. This search turned up a large quantity of citations; however, none 
of the citations reviewed were useful for identifying the information needs of Hospitals or 
effective communication strategies. 

♦ Newsletters and manuals directed toward Hospitals were identified and reviewed to determine 
whether they contained useful insights and information of the information needs and 
communication processes that are relevant to Hospitals interactions with HCFA. The focus of 
these articles was primarily on step-by-step operational compliance. No useful information for 
this project was found in these materials. 

♦ HCFA materials that are disseminated to Hospitals were obtained and reviewed. This material 
provided the basis for understanding the information currently being provided by HCFA to 
Hospitals and for developing a framework for the process through which Hospitals are 
currently interacting with HCFA. This framework was then used to develop the Interview 
Guides and Site Visit Protocols that were used for the inventory and focus group components 
of the study. 

Because no relevant information was identified in our search of the literature, no literature review 
was prepared for this project and included in this Inventory Report. Instead, the research team 
concentrated on reviewing HCFA materials in order to understand the current information flows 
and interactions and to assess current communication strategies. The results of this review are 
presented in Appendix E and formed the basis for developing the data collection strategy for the 
project. 



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APPENDIX D 
INTERVIEW GUIDES 



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HCFA MARKET RESEARCH FOR PROVIDERS: HOSPITAL MODULE 
Interview Protocol for Hospitals 



Target Questions: 

What types of information do you require from HCFA about Medicare? 

Which information needs does HCFA meet best? 

Do you have unmet or poorly-met needs for information from HCFA? 

From whom, other than HCFA, do you get useful information about HCFA and Medicare? 



Information Needs of Hospitals 

What categories of information do you require from HCFA? 

Do you have formal or informal mechanisms for assessing your information needs? If yes, please 
describe these. 

Do you get information about HCFA and Medicare from other sources (e.g., associations, fiscal 
intermediaries)? If yes, which ones, and what types of information do they provide? 

Interactions With HCFA 

From which HCFA offices do you receive information (in order of importance)? 

From which HCFA offices do you request information (in order of importance)? 

♦ How do you decide which office to contact? 

♦ What types of information do you seek from each? 

Does HCFA have mechanisms to regularly survey your information needs and to find out 
whether they are being met? If yes, please describe these. 

Has HCFA conducted special surveys or other activities to determine your information needs and 
to find out whether they are being met? If yes, please describe these. 

What mechanisms do you use to communicate your information needs to HCFA? 

♦ Which are most effective in obtaining information? 



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Communication Tools 

What mechanisms or forms of communication does HCFA use to provide information to you 
routinely? In response to specific inquiries'. 

♦ For each, what types of information are conveyed? 

♦ Which do you find most useful, and why? 

♦ Which do you find least useful, and why? 

Evaluation and Feedback 

Have you evaluated the information provided to you by HCFA in formal or informal ways? 

♦ What evaluation methods have you used? 

♦ Have you communicated the results of evaluations to HCFA? 

♦ Has HCFA been responsive to your communications? 

From your perspective, what would be the most beneficial outcome of this study? 



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HCFA MARKET RESEARCH FOR PROVIDERS: HOSPITAL MODULE 
Interview Protocol for Fiscal Intermediaries 



Target Questions: 

What types of information do you require from HCFA about Medicare hospital issues? 

What mechanisms does HCFA use to communicate this information? 

♦ Which are the most and least effective? 

What mechanisms do you use to communicate your information needs to HCFA? 

♦ How responsive is HCFA to your communications? 

Do ., ou have unmet or poorly-met needs for infonnation from HCFA? 

What types of information from HCFA do you provide to the hospitals you serve? 



Information Needs of Fiscal Intermediaries 

What categories of information do you require from HCFA? 

Do you have formal or informal mechanisms for assessing your information needs? If yes, please 
describe these. 

Do hospitals request information from you about HCFA policies or procedures related to 
Medicare? 

♦ What types of information? 

Do you carry out any activities to determine hospitals' needs for information from HCFA? If yes, 
what form do these activities take? 

Interactions With HCFA 

From which HCFA offices do you receive information (in order of importance)? 

From which HCFA offices do you request information (in order of importance)? 

♦ How do you decide which office to contact? 

♦ What types of information do you seek from each? 

Does HCFA have mechanisms to regularly survey your information needs and to find out 
whether they are being met? If yes, please describe these. 



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Has HCFA conducted special surveys or other activities to determine your information needs and 
to find out whether they are being met? If yes, please describe these. 

What mechanisms do you use to communicate your information needs to HCFA? 

♦ Which are most effective in obtaining information? 

In what ways is HCFA responsive or not responsive to your information needs. 

Communication Tools 

What mechanisms or forms of communication does HCFA use to provide information to you 
routinely? In response to specific inquiries? 

♦ For each, what types of information are conveyed? 

♦ Which do you find most useful, and why? 

♦ Which do you find least useful, and why? 

Do you distribute information from HCFA to hospitals? 

♦ What is the content of this information? 

♦ What formats do you use to transmit this information? 

Evaluation and Feedback 

Have you evaluated the information provided to you by HCFA in formal or informal ways 9 

♦ What evaluation methods have you used? 

♦ Have you communicated the results of evaluations to HCFA? 

♦ Has HCFA been responsive to your communications? 

From your perspective, what would be the most beneficial outcome of this study? 



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HCFA MARKET RESEARCH FOR PROVIDERS: HOSPITAL MODULE 



Interview Protocol for Associations 



Target Questions: 

What types of information do you and your members require from HCFA regarding Medicare? 

How does HCFA supply information? 

How effectively does HCFA provide information to you and your members? 
♦ How do you judge effectiveness? 

Do you have unmet or poorly-met information needs for information from HCFA? 



Relationship of Association to Members and to HCFA 

How do you interact with your members with regard to information from HCFA on Medicare? 

♦ Are you involved directly as an intermediary between HCFA and your members in relation to 
information about Medicare? 

♦ Do members come to you with specific requests for information from HCFA? 

♦ Do you discuss HCFA information issues formally at, e.g., annual meetings, or in printed 
material provided to your members? 

Does the association have a direct relationship with HCFA? Does the relationship involve 
discussion about Medicare information for your members? 

Gathering Data on Information Needs of Members 

Do you formally or informally gather data on the information needed by your members from 
HCFA regarding Medicare? 

♦ What mechanisms do you use to gather information? 

What types of information do your members require from HCFA (ranked in order of 
importance)? 

Interactions With HCFA 

Do you have mechanisms for interacting with HCFA to inform them of your members' needs? 
To make suggestions for improving information provision? If so, what are they? 

With which HCFA offices do you interact for Medicare information (ranked in order of 
importance)? 



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What are the mechanisms by which HCFA responds to your information requests or suggestions? 

Co nmunication Tools 

What methods do you use to disseminate Medicare information from HCFA to your members? 

Which of these tools have been most effective, and why? 

Has your association developed particularly innovative or successful means of communicating, 
which might be adopted by HCFA? Please describe these. 

Is your association pursuing new initiatives for communicating information about Medicare to 
your members? 

Evaluation and Feedback 

Have you evaluated, either formally or informally, the tools you use to communicate Medicare 
information to your members? 

From your perspective, what would be the most beneficial outcome of this study? 



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APPENDIX E 

CURRENT HCFA COMMUNICATION PROCESSES AND 

METHODS 



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APPENDIX E 

CURRENT HCFA COM1N UNICATION PROCESSES 
AND METHODS 



Overview 

Two major areas of communication exist between HCFA and hospitals—financing and quality 
assurance. This chapter outlines the process and communication methods between HCFA and its 
partners in disseminating financing and quality assurance information to hospitals through the 
various branches of the Central Office, Regional Offices, Fiscal Intermediaries, Peer Review 
Organizations, Associations, State Survey Agencies, and others 2 . Information was obtained 
through interviews with representatives of these organizations and a review of their transmittals, 
memoranda, and other internal documents. Figure E-l illustrates hospital interactions with the 
Medicare program and the sources of Medicare information for hospitals. Table E-l summarizes 
key written materials provided by HCFA to hospitals. Some additional materials published for 
the Medicare program in general or other areas of program operations are accessible to hospitals 
on-line via HCFA's web page. 



Figure E-l: Hospital Sources of Medicare Information 









Central 
Office 










Regional 
Offices 


Fiscal 
Intermediaries 






/ \ 


















Researchere 


HOSPITALS 


Peer Review 
Organizations 


^ 






/ 



Third R 
Information* 
Vendors 



Third Party n 
Consulting 
Firms 




2 The descriptions of the HCFA processes and communication methods contained in this report were developed 
based upon conversations held with HCFA staff members in January, 1997. Since that time, HCFA has undergone 
major reorganization and therefore some of the distribution of responsibilities and titles of sections of Central Office 
may have charged. 



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TableJE-1: List of Written Materials Provided by HCFA to Hospitals 



HCFA PUBLICATION 


PUlJ»OSE 


1 . Medicare Hospital Manual 


1. Contains policies and procedures applicable to 
the delivery of hospital services, claims 
instructions, billing procedures, coverage; 
requirements, and related Medicare policies. 


2. Medicare Provider Reimbursement 
Manual: Part I 


2. Contains instructions for determining the 
reasonable costs for provider services, including 
provider payment determinations and appeals 
procedures. 


3. Medicare Provider Reimbursement 
Manual: Part II 


3. Contains instructions on how to complete the 
cost report form HCFA-2552 to be filed in an 
annual basis by hospitals and hospital health care 
complexes. Also introduces the Provider Cost 
Report Reimbursement Questionnaire, HCFA 
339, to assist hospitals in the preparation of an 
acceptable cost report and minimize the direct 
contact between the provider and the 
intermediary. 


4. Medicare Hospital Manual 
Transmittals 


4. Changes in policy are formally incorporated into 
the Hospital Manual through transmittals that 
describe new instruction and its date of 
effectiveness. These transmittals are forwarded 
to FIs, who then provide copies to the hospitals. 
Inform hospital of these changes through 
quarterly provider bulletins or special 
memoranda. 


5. Program Memoranda 


5. Billing/reimbursement instructions requiring 
more immediate implementation are 
communicated via Program Memorandums to 
FIs. FIs then inform hospital of these changes 
through quarterly provider bulletins or special 
memoranda. 


6. Medicare End Stage Renal Disease 
Network Organizations Manual 


6. The manual, under development, provides 
project officers with technical instructions and/or 
changes in procedures. 



Financing 



HCFA Central Office 



The HCFA Central Office provides national operational and policy guidance for the 
administration of the Medicare program and oversees programs designed to ensure Medicare's 



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fiscal integrity (see_Figure E-2). Several of its offices and centers, including the Bureau of 
Program Operations, Bureau of Policy Development, Provider Reimbursement Review Board, 
and Freedom of Information and Privacy Office, operate closely with ROs, FIs, hospitals, and 
their representatives in communicating Medicare policy. 

Figure E-2: Communication on Financing 



Central Office *- 



Regional Office 



Fiscal Intermediaries 




Hospital Associations 



Consultants, 
Law Firms, 
Accountants, 
and Actuarials 



Hospitals 




Third Party 
Information 
Vendors 



The Bureau of Program Operations (BPO). The BPO provides national direction and 
technical guidance for administration of the Medicare program. Its broad responsibilities include 
financial management of Medicare; providing guidance to the government on the purchase of 
claims processing services from the private sector; monitoring program oversight and 
improvement; direction of contractor performance standards; and recommendations on penalties 
and awards. 

BPO communicates on these topics with hospitals and other Medicare partners through the 
preparation and revision of manuals, most notably the Medicare Hospital Manual. Issued to 
hospitals participating in the Medicare program, the Medicare Hospital Manual contains policies 
and procedures applicable to the delivery of hospital services, claims instructions, billing 
procedures, and related Medicare matters. 

Other communication activities occur around special projects. For the 1996 Flu Campaign, BPO 
representatives conducted site visits to hospitals, community centers, and nursing homes to learn 
more about how providers were implementing the flu vaccine benefit. Besides writing project 
memoranda, BPO also develops Q&A fact sheets to explain new billing instructions to providers. 
Q&A are distributed to providers by Regional Offices and FIs 

The Bureau of Policy Development (BPD). Establishes national program policy on all 
issues of Medicare payment including provider payment, provider accounting and audit, and 
physician and medical services payment. Its Office of Hospital Policy develops, evaluates, and 



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maintains policies pertaining to the prospective payment system (PPS) 3 for inpatient hospital 
services and the payment of graduate medical education. It also evaluates and maintains policies 
for ietermining and applying rates of increase ai i limitations to the costs of hospital services not 
reimbursed under PPS. 

Manuals and policy issuances from BPO and BPD reach hospitals through the following path: 

1. An official policy change published as a final rule, following an official comment period and 
revision, in the Federal Register is interpreted by BPO for corresponding billing instructions 
to Fiscal Intermediaries (FIs). Manual instructions may also be prepared in response to new 
legislation or coverage clarification which do not always require rule or regulation changes. 

2. Changes in policy are formally incorporated into the Medicare Hospital Manual through 
transmittals that describe the new instruction and its date of effectiveness. BPO transmittals 
are distributed to FIs quarterly. 

3. Instructions requiring more immediate implementation are communicated via Program 
Memorandum to FIs. FIs then inform hospitals of these changes through quarterly provider 
bulletins or special memoranda. In these instances preparation of a complete manual 
instruction is not feasible due to short turn around time. However, most Program memoranda 
are later incorporated into a manual instruction. 

Division of Prospective Payment System. The majority of communication between the 
Division of Prospective Payment System and hospitals pertains to PPS rates. Annual updates to 
PPS are published in the Federal Register allowing individual hospitals, trade associations, and 
other interested parties the opportunity to comment and review data files. During this period, 
HCFA receives between 200-300 letters, often as a result of write-in campaigns. HCFA must 
answer all letters, explaining the reasoning behind the proposed changes. Comments are often 
included in the preamble to the final rule. The Division publishes the annual updates in the 
Federal Register. PPS rate information is available through public use data files (see Table E-2). 

Division of Hospital Services. The Division of Hospital Services is responsible for 
policies, regulations, and rules pertaining to the capital prospective payment system for inpatient 
hospital services, payment for graduate medical education, the exclusion of certain hospitals 
from PPS, and exceptions and adjustments to PPS rates. Since changes in graduate medical 
education (GME) rates and regulations are infrequent, hospitals and the Office have limited 
interactions pertaining to GME. Generally, the Division of Hospital Services receives and 
responds to correspondence from medical residents and specialty societies. Some of the 
Division's program memoranda regarding graduate medical education policy have been 
disseminated via the internet by medical specialty societies. 

Regional Offices may contact the Division of Hospital Services directly to obtain written 
clarification for specific regulations on behalf of providers. The Division answers these requests 



3 In response to rapid growth in federal expenditures for the Medicare Hospital Insurance Program, the Tax Equity 
and Fiscal Responsibility Act of 1982 required the development of a prospective payment system (PPS) for 
Medicare reimbursement to hospital and other institutional providers. PPS pays providers a predetermined rate per 
discharge, based on a classification system that groups individuals by diagnosis. 

Barents Group LLC 68 April 16, 1998 



through a memorandum which is automatically forwarded to all Regional Offices and FIs across 

the country. 

Since specialty hospital units, such as psychiat :c and rehabilitation centers, are not reimbursed 

under PPS, the Division of Hospital Services formulates and evaluates national policies 

pertaining to the exclusion of these special units from the PPS. In order to resolve these 

exclusions, hospitals have regular phone contact with the Division, usually through lawyers and 

consultants. 

Table E-2: PPS Public Use Data Files 



Data Files 


Contents 


HCFA Hospital Wage Index Survey File 


Contains the hospital hours and salaries used to 
create the PPS indices. 


Hospital Wage Indices File 


Contains a history of all wage indices used 
since October 1, 1983. 


PPS SSA/FIPS MSA State and County 
Crosswalk File 


Contains state and county codes used by the 
Social Security Administration and the Federal 
Information Processing Standards by county 
name and metropolitan statistical area. 


Reclassified Hospital by Provider File 


Contains a file of hospitals reclassified for the 
purpose of assigning a new wage index. 


HCFA Case-Mix Index File 


Contains the Medicare case-mix index by 
provider number as published in each year's 
update of the PPS. The case-mix index 
measures the costliness of cases treated by a 
hospital, relative to the cost of the national 
average of all hospital cases. 


ICD-9-CM Version 14.0 File 


Contains four associated files: major diagnostic 
category, diagnostic related group, and ICD-9- 
CM diagnostic and procedure codes. 


PPS - Payment Impact File 


Contains data used in estimating FY 1997 
payments under PPS for operation and capital. 


PPS - Standardizing File 


Contains information that standardizes the 
charges used to calculate tentative weights to 
determine payments under PPS. Variables 
include COLA, case-mix index, DSH, and 
MSA. 


Provider Specific File 


Contains a component of the PRICER program 
used by FIs to compute individual DRG 
payments. Includes records for all PPS eligible 
hospitals. 


After Outlier Removed/Before Outlier 
Removed Tables 


Contains data used to develop the DRG relative 
weights. 


DRGs Relative Weight File 


Contains DRGs' narrative description, relative 
weight, geometric mean, length of stay, and day 
outlier trim points. 



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Division of Cost Principles and Reporting. The Division of Cost Principles and Reporting 
develops policies pertaining to the use of all cost reporting forms, schedules, and other related 
instruct] »ns necessary for the reimbursement o" providers. The division is also responsible for 
writing and updating the Provider Reimbursement Manual, which contains reimbursement 
guidelines for all provider services under Part A and exhibits and instructions for the completion 
of the cost reporting forms. 

Ail hospitals participating in Medicare must submit an annual cost report to receive payment for 
services rendered to beneficiaries. The steps involved in this cost reporting process are outlined 
below. 

1. Cost Reporting Forms and Instructions: The Division prepares, updates, and distributes the 
provider cost reporting forms and instructions used by hospitals in the Medicare program. 
When cost reporting regulations are changed, the Division interprets the law and develops 
policy directives which are communicated via transmittals to hospitals and Fis. The Division 
last conducted a major revision of the regulations in 1992. 

The cost report forms and instructions are found in Part II of the Provider Reimbursement 
Manual. Although there have been various attempts to reduce the paperwork involved in the 
cost reporting process, the forms and instructions number 779 pages. The development of 
electronic reporting and computer accounting systems has helped to streamline the cost 
reporting process. 

2. Electronic Reporting to Fiscal Intermediaries: Conforming to the conditions and principles 
set forth in the Provider Reimbursement Manual, hospitals are required to submit an 
electronic cost report to their FIs every year. (HCFA may waive the electronic reporting 
requirement if the electronic submission results in financial hardship to the hospital 
institution.) Hospitals must submit the cost report within 150 days of the end of the fiscal 
year. 

3. Cost Report Audits: Fiscal Intermediaries are responsible for auditing the hospital cost report 
data before it is submitted to the HCFA Central Office. The provider audit function includes: 
field audits, desk reviews, and settlements. 

4. Disclosure of Cost Report Information: At the Central Office, the Bureau of Data 
Management and Strategy (BDMS) edits and processes the cost report data. An important 
part of this data processing function is the creation of the Minimum Data Set which contains 
cost, financial, and other information from the Medicare Cost Report. The Minimum Data 
Set can be purchased through the public use files catalog, which is updated on a quarterly 
basis by BDMS. Disclosure of any other cost report information is limited by FOIA 
regulations. 

Division of End Stage Renal Disease. The Division develops policies and instructions 
concerning the coverage of End Stage Renal Disease (ESRD) and organ transplant services for 
Medicare beneficiaries. The Division determines eligibility criteria and coverage for liver, lung, 
kidney and heart transplants, while the Regional Offices oversee ESRD networks. 



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The organ transplant centers apply for Medicare reimbursement based on regulations of organ 
transplants published in the Federal Register. Based on these regulations, the Division 
determines corresponding criteria which c . gan transplant centers must meet in order to receive 
reimbursement. Transplant surgeon consultants review applications and make recommendations 
to KCFA, with HCFA making the final selection. 

HCFA conducts an annual survey of all facilities certified to provide Medicare-covered renal 
dialysis and transplantation. The End Stage Renal Disease Facility Survey and its results are 
distributed through a public use data file, ESRD Facility Survey File. Each record of this file 
includes facility information and information on the number of patients served, the number of 
dialysis treatments provided and the number of kidney transplants performed. The survey covers 
services to both Medicare and non-Medicare patients. 

The Office of Correspondence. The Office of Correspondence receives, controls, and 
tracks all correspondence received by BPD. All correspondence addressed to BPD is first 
received by the Office of Correspondence and then forwarded to the appropriate parties, 
including other HCFA components, federal agencies, and state and local officials. An important 
function of this Office is the management of the BPD internal control system. The 
Correspondence Assignment Tracking and Control System (CATCS) allows BPD to manage 
correspondence and assure response. The Office receives requests for information from 
consultants, lawyers, and accountants; often these inquiries are unique to a provider's operation 
at a particular point in time. 

The Provider Reimbursement Review Board (PRRB). The PRRB conducts hearings to 
resolve payment disputes between Medicare providers and Fiscal Intermediaries. Upon 
completion of these hearings, the Board renders decisions that constitute the initial step in 
HCFA's judicial review process. PRRB issues about 100 decisions every year and providers 
settle an additional 1,000 appeals each year outside of the PRRB. Approximately 10,000 appeals 
are pending resolution this year. 

When the provider is dissatisfied with the Intermediary's resolution of payment disputes, the 
provider has the right to appeal the decision to the PRRB when the amount is over $10,000 per 
cost reporting period. A written request for appeal must be filed with the PRRB within 1 80 days 
of the date that the Notice of Amount of Program Reimbursement (NPR) is issued by the Fiscal 
Intermediary. Upon receipt, the PRRB reviews the hospital's records and sends out a letter of 
acknowledgment with an assigned case number. When the initial request is completed, the Board 
asks the hospital to submit a draft list of issues to the Board and the Fiscal Intermediary. The 
Fiscal Intermediary is required to review the hospital's list and discuss it with the hospital within 
60 days from receipt of the list. 

However, when a resolution is not reached between the hospital and the fiscal intermediary, the 
case (with a signed list of issues) is forwarded to the PRRB. Upon receipt of the list, the case is 
placed on the Board's monthly calendar. Based on this calendar, PRRB sends a Notice of 
Hearing and Request for Position Papers to the parties involved (fiscal intermediary and hospital) 
indicating the month in which the case will be heard and when position papers are to be filed. 

Barents Group LLC 71 April 16, 1998 



Position papers, from_both the intermediary and the hospital, are due 4 months before the PRRB 
hearing. To facilitate communication between the Board and the parties involved in this lengthy 
process, the PRRB office operates an autom; ed phone service where callers can obtain an 
update of their case. 

Composed of five members appointed by the Secretary of DHHS, the PRRB includes at least one 
certified public accountant and two representatives of service providers. The average hospital 
appeal is $100,000. Approximately 95 percent of the cases, settle in three years. Though 70 
percent of decisions are made in favor of the provider, about 50 percent of decisions are 
overturned by the HCFA Administrator. The n?xt level of review, if sought, is Federal District 
Court. 

The Division of Freedom of Information and Privacy. (DFOIP) is the HCFA central 
office responsible for administering the Freedom of Information Act (FOIA). FOIA provides 
that, upon request from any person, a federal agency most release any agency record unless that 
record (or portions of it) falls within one of the nine statutory exemptions. HCFA's Freedom of 
Inff -mation (FOI) Officer, who is the director of DFOIP, has the sole authority for granting or 
denying FOIA requests for HCFA's records. However, due to the large volume of requests that 
HCFA receives and processes annually, PFOIP has established certain categories of documents 
that may be directly released to requestors by program offices including HCFA Central and 
Regional office components and Medicare contractors). The documents in this list are requested 
frequently and the FOI Officer has determined that they need not be forwarded to DFOIP for 
review against the FOIA exemptions. Provider cost reports, all policy issuances, summary 
provider statistical and reimbursement reports, etc., are considered to be direct release 
documents. 

Most hospitals request FOIA documents through their lawyers or business consultants. 
Hospitals' FOIA requests typically relate to the appeal of a reimbursement or coverage decision. 
One common complaint among hospitals is that the FOIA requests processed in DFOIP take too 
long to be completed. Currently, the office has a 1,000 case backlog, with approximately 30,000 
requests per year. For those requests processed in DFOIP, the division reviews responsive 
records, determines if the records (or portions of the records) will be released to the public, and 
provides responsive notifications to requestors. 

Under the Privacy Act of 1974, the Office safeguards the management of records containing 
information on individuals (i.e., physician or beneficiary) against an unwanted risk on 
beneficiary privacy. Hospitals, physicians, and suppliers as organizations may not access 
business information about themselves under the Privacy Act, but may retrieve information 
accessible through the provider's unique identifier under FOIA. Records containing individually 
specific information may not be disclosed unless the requestor has either the consent of 
beneficiaries to whom the information applies or the requester qualifies under one of the twelve 
disclosure exemptions of the Privacy Act. Questions of public disclosure* are directed to the 
Privacy Coordinator at the Regional Office. 



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Regional Offices 

HCFA's Regional Offices have a limited role in communication with hospitals on financing 
issues. Most reimbursement questions from pr.viders are routed from Regional Offices to the 
Central Office. The RO may, but typically does not, oversee the Fiscal Intermediaries in 
transmitting HCFA CO changes to Medicare hospital policy When hospitals experience 
difficulties in carrying out HCFA policy, the RO sometimes takes a more active approach by 
providing technical and educational assistance to fiscal intermediaries and hospitals. Billing 
disputes between hospital? and FIs are mediated by the Regional Offices. 

The Contractor Performance Evaluation (CPE) is a system of criteria and standards that evaluates 
contractor effectiveness and efficiency in operating on behalf of the Medicare program. The RO 
participates in CPE through the evaluation of Medicare contractor fraud and abuse detection, 
control mechanisms such as post payment review, and many other activities. 

Fiscal Intermediaries 

Fiscal Intermediaries (FIs) perform bill processing and benefit payment functions for the 
Hospital Insurance Program of Medicare. The FI is required to ensure payments for covered 
services to beneficiaries, determine whether services furnished were medically necessary and 
reasonable, and handle disputes raised by hospitals. Optional functions—determined by 
agreement with Central Office—may include conducting provider audits, utilization patterns, 
resolution of cost report disputes, reconsideration of coverage determinations, special reports for 
Central Office, and dual intermediary responsibilities (when provider networks are served by 
different intermediaries). 

The Fiscal Intermediary (FI) serves as the primary channel for communication between HCFA 
and hospitals. When the Central Office announces a change in Medicare's hospital policy, the FI 
is responsible for transmitting this information to hospitals through bulletins, newsletters, or 
news releases. Intermediaries also provide hospitals with technical assistance through 
educational programming to ensure that data are accurate and that electronic cost reports are filed 
correctly, though these activities have been constrained by budget reductions. FIs conduct annual 
audits of cost reports. FIs and carriers are required to issue at least one Medicare Secondary 
Payer (MSP) bulletin in each fiscal year. 

FIs may employ provider relations and education representatives to provide on-site training for 
billing procedures as well as to providers who have been the subject of beneficiary complaints or 
fraud and abuse charges. Additionally, FIs may conduct seminars to refresh knowledge of 
Medicare regulations, billing procedures, and use of the manuals. Within each FI, a division of 
provider reimbursement and audit is responsible for provider reimbursement and cost reports, 
tracking interim payments made to hospitals receiving and processing cost reports, settlements 
and appeals less than $10,000, and acting as a liaison with the Central Office for provider audits, 
quality review programs, and Congressional inquiries. FIs may also provide beneficiary and 
provider assistance through telephone hotlines. 



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Some FIs train new_ providers and provide them with required manuals, however there is no 
required frequency for such training. Intermediaries automatically receive the Hospital Manual, 
Skilled Nursing Facility Manual, Home Health Agency Manual, and the Provider 
Reimbursement Manual and any subsequent revisions. Providers deal directly with their 
intermediary to obtain manuals and revisions and, in the case of a question or issue, can contact 
their Regional Office. 

FI representatives have participated on association committees and have spoken at association 
meetings on subjects including: 1) hospital turnover of ownership and conversion; 2) denials 
resulting from clinical reasons or poor documentation; and 3) introducing hospitals to the cost 
reporting process. 

Other Sources of Information 

Associations. The American Hospital Association (AHA) is the major trade association 
for hospitals. Its Washington office, the Center for Public Affairs, deals with national issues and 
has frequent contact with HCFA's Central Office. AHA serves as a member of the Medicare 
Technical Advisory Group (MTAG). 

AHA routinely tracks Federal Register notices published by HCFA and informs its members of 
the implications of those notices for hospital operations. This includes summarizing the salient 
features of final rules that affect the way hospitals operate in relation to Medicare. AHA also 
alerts members to the publication of proposed rules or notices of HCFA's intent to propose rules 
and suggests that hospitals provide comments to AHA to be passed on to HCFA, or to comment 
directly to HCFA. 

AHA produces a weekly newspaper for members and sends frequent issues of FAX UPDATE, 
which covers political activities in Washington. The Association solicits input from members on 
various topics, mainly on an ad hoc basis. For example, if HCFA sends a document to AHA for 
comments, AHA will send it out to select members for their review. Each state has its own 
hospital association (not affiliates of AHA) and AHA often communicates with the state 
associations to runnel information to individual hospitals. Hospitals generally have more contact 
with their state associations than with the AHA directly. 

The Healthcare Financial Management Association (HFMA) is a professional society involved 
with the financial management of a range of provider organizations. HCFA and the Medicare 
program account for a substantial share of HFMA activities. 

HFMA staff interact with HCFA on a regular informal basis, participate as a founding member of 
the Medicare Technical Advisory Group, and provide input through other formal channels. Many 
daily interactions stem from requests for information and clarification from HFMA members and 
often concern Medicare billing rules. HCFA's website is useful to HFMA for obtaining news 
(e.g., testimony, press releases) and general information (e.g., fact sheets). HFMA uses the 
website as a primary source of information for their own publications, and refers members to it 
for general information. In addition to dealing with the Central Office directly, HFMA gathers 



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Medicare information from the Federal Register, Commerce Clearinghouse publications, and 
commercial versions of the Medicare hospital billing manual. 

Through a range of services, HFMA informs its members of significant developments in the 
Medicare program. Publications include a monthly magazine, weekly news updates (HFMA 
Express NeM's), and various other newsletters. Other media include a telephone recorded 
"newsline," "Fax-It" (a document retrieval service for large numbers of printed materials by fax), 
a telephone help line, and the most recent addition, a web page. On-line interactive internet 
sessions have recently begun, with an HFMA professional available for questions. The 
Association holds national and local chapter meetings, which may include HCFA or Fiscal 
Intermediary representatives. 

Consultants and Trade Press. Some hospitals rely on accounting firms, consultants, and 
lawyers to track updates to Medicare regulations and to prepare cost reports. Those that hire 
consultants may be able to prepare cost reports more quickly because of the consultants' prior 
knowledge of and connections to HCFA. In addition to information produced by consultants, 
hospitals can also reference the St. Anthony's Medicare Manual, Commerce Clearinghouse 
publications, the Medicare/Medicaid CD-ROM Library, and other communications produced by 
trade press and third-party vendors. 

Quality 

H CFA Central Office 

The Central Office provides operational direction and policy guidance of Peer Review 
Organizations and related quality assurance programs to assure the delivery of quality, safety, 
and appropriateness in health care services (see Figure E-3). Its Health Standards and Quality 
Bureau has primary responsibility for these goals. 



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Figure E-3: Communication on Quality 



JCAHO 



Central Office *- 

I 1 1 

Peer Review 
Organizations" 

i t a 

v State Certification and Survey Agencies 
JL t JL 



■Regional 
-Offices 




Health Standards and Quality Bureau (HSQB). The HSQB provides overall 
programmatic direction for implementation and enforcement of health quality and safety 
standards for providers and suppliers who participate in the Medicare program. Responsibilities 
include administering and evaluating the national Medicare survey and certification program; 
monitoring certification of participating providers and suppliers for compliance with established 
conditions and standards; and implementing, operating, and evaluating professional review and 
other medical review programs. HSQB conveys operational policy and official interpretations of 
policy to Regional Offices and State Survey and Certification Agencies. HSQB works with both 
entities to ensure that certification staff is well-trained and that hospitals in the Medicare program 
are compliant with federal regulations. 

Direct communication between HSQB and hospitals is limited. In most cases, hospitals access 
HSQB information through Regional Offices or State Survey and Certification Agencies. When 
hospitals do contact officials in HSQB, they tend to do so through their lawyers or consultants. 
Lawyers usually call or write HSQB for assistance in interpreting HCFA regulations. In the past, 
many questions have centered on PPS exclusions. 

HSQB writes and updates the State Agency and Regional Operation Manuals. These manuals 
contain an Appendix of Interpretive Guidelines and Survey Procedures to assist State Agency 
and Regional Office staff in their survey activities. The protocols outline relevant areas and items 
to be observed under each regulation and, in some cases, include survey methods. The 
Guidelines detail the general provision of emergency services, administration, basic hospital 
functions, optional hospital services, and requirements for specialty hospitals (see example in 
Table E-3). 



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April 16, 1998 



Table E-3: Example from the Interpretive Guidelines and Survey Procedures 



Regulation 


Interpretive Guidelines 


Survey Procedures 


482.12 Condition of Participation: 


Condition of Participation: 


Condition of Participation: 


Governing Body 


Governing Bodv 


Governing Bodv 


The hosnital must have an effective 


In the absence of an 


Verify that the hospital has 


governing body legally responsible for 


organized governing body, 


an organized governing 


the conduct of the hospital as an 


there must be written 


body or has written 


institution. However, if a hospital does 


documentation that 


documentation that 


not have an organized governing body, 


identified the individual or 


identified the individual or 


the persons legally responsible for the 


individuals that are 


individuals that are 


conduct of the hospital must carry out the 


responsible for the 


responsible for the conduct 


functions specified in this part that pertain 


conduct of the hospital 


of the hospital operations. 


to the governing body. 


operations. 





Due to the landscape format of the interpretive guidelines and survey procedures, it could not be 
included in the general CD-ROM Medicare Library. 

Regional Offices 

HCFA's Regional Offices (ROs) assist beneficiaries and providers with Medicare questions, 
resolve complaints involving providers serving Medicare beneficiaries, and ensure that providers 
and suppliers participating in Medicare meet HCFA requirements. Regional Offices may contain 
functional or organizational units such as: customer service, survey and certification, Medicare 
operations, audit and reimbursement, beneficiary services, managed care, and PRO's. 

Direct communication between ROs and hospitals is mostly limited to beneficiary complaints. 
When a beneficiary files a complaint with the RO about the quality of services received from a 
hospital, the RO evaluates the complaint and may authorize the State Agency to initiate an 
investigation. The RO is ultimately responsible for notifying the hospital and the beneficiary 
about the State Agency's findings. Depending upon the nature of the complaint, the PRO may or 
may not be involved in the investigation. 

The ROs monitor the process for certifying that participating providers and suppliers are in 
compliance with HCFA's conditions and standards of participation. To accomplish this, ROs 
collaborate with Central Office's Health Standards and Quality Bureau (HSQB) and the State 
Survey and Certification Agency. While HSQB assumes primary responsibility for preparing 
regulation specifications and sending updates to the Hospital Manual directly to hospitals, the 
Regional Offices review the State Agency's performance and provide training and assistance 
when necessary. The RO's Survey and Certification unit conducts bi-weekly conference calls 
with its Central Office counterpart to discuss hospital and other provider certification issues. In 
addition, the Central Office produces a periodic validation survey report that gives ROs a list of 
the compliance status of all hospital facilities in their areas. 

Each Regional Office includes a Division of Health Standards and Quality to ensure health care 
providers and suppliers participating in the Medicare program meet HCFA requirements. The 



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April 16, 1998 



Division accomplishes this by: 1) evaluating the performance of State Survey and Certification 
Agencies, 2) providing technical assistance and feedback to the State, 3) updating the On-line 
Survey Certification and Reporting Process dataoase (OSCAR), and 4) communicating the State 
Agency's findings to HSQB. ROs have the authority to determine if a hospital is in compliance 
with HCFA requirements. 

Peer Review Organizations 

Peer Review Organizations (PROs) are groups of practicing physicians and other health care 
professionals contracted by HCFA to monitor the quality of care provided to Medicare patients 
by hospitals, skilled nursing facilities, home health agencies, managed care plans, and 
ambulatory surgical centers. Over the past several years, HCFA has changed the PRO strategic 
direction from punitive, retrospective audits of individual medical records to collaborative, 
prospective quality improvement projects. This new role includes analyzing practice patterns, 
rather than individual cases; assisting in the implementation of practice guidelines; disseminating 
information; and assisting hospital personnel in identifying and operationalizing quality 
improvement opportunities. 

Communication between PROs and Central Office generally focuses on the overall mission of 
the Medicare program and nationwide initiatives. PROs will soon receive HCFA CO surveillance 
data analyzing trends and geographic variations in admission rates for particular conditions, 
length of stay, and other utilization measures. Trends in data will be used to direct PRO research. 

The Contract Officer, located at the Central Office, is responsible for approving the scope of 
work for each PRO. The Project Officer, located at the RO, authorizes the activities of the PRO 
and evaluates its performance. A Scientific Officer, also at the Regional Office, advises the 
Project Officer on the PRO's performance. Four Regional Offices handle all activity for the 38 
statewide or multi-state PROs. 

PROs are also participating in a number of research and demonstration projects—some 
undertaken by the PRO itself with HCFA's approval and others undertaken by request of the 
Central or Regional Offices. In recent years, the Central Office has increasingly asked PROs to 
participate in special initiatives. For example, the Delmarva Foundation for Medical Care has 
developed performance measures to implement clinical practice guidelines as a HCFA special 
initiative. In other examples, the Central Office has linked multiple PROs to carry out projects. 

With the change in PRO direction, hospitals are beginning to approach PROs collaboratively 
rather than adversarially. PROs are initiating contacts and programs within hospitals to 
collaborate on ways to improve the quality of care. One PRO is undertaking continuing medical 
education to improve relations between the PRO and hospitals. The PRO has used techniques 
such as videotapes and audio tapes, as well as more conventional means, for continuing 
education programs. They are currently planning expanded regional education programs around 
the state. Shifting the nature of the relationship with hospitals has required one-on-one contacts 
with the hospitals, in place of simply sending reports. PRO representatives have worked with 
hospital personnel to identify opportunities for quality improvement (e.g., the regular use of 



Barents Group LLC 78 April 16, 1998 



thrombolytic drugs-fcr patients with acute myocardial infarction) and then helped to develop new 
procedures to meet the goals set. These projects have generally worked very well, but are 
obviously quite laborMntensive for the PRO, thus the number they can carry out is limited. 

J oint Commission on Accreditation of Healthcare Organizations 

The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) accredits about 
16,000 health care organizations in the United States, including 70 to 80 percent of all hospitals. 
The main function of JCAHO is to evaluate hospitals and other health care organizations 
according to specific standards that they have developed over the years. Survey reports are 
available not only to the organizations themselves, but also to HCFA. In 1994, JCAHO began 
releasing performance reports (based on the survey reports) on individual accredited 
organizations. Starting in 1998, all the reports will be available free on the Internet. 

Once hospitals receive JCAHO accreditation, they are "deemed" accredited by Medicare (this is 
not necessarily true for organizations other than hospitals) and are not subject to regular 
Medicare survey and certification procedures. JCAHO accreditation does not, however, excuse 
hospitals from complying fully with Medicare conditions of certification, even if certain 
conditions are not part of JCAHO accreditation. To assure that hospitals are not vulnerable to 
challenge by HCFA, JCAHO tries to assure that their standards are broadly consistent with 
HCFA's. In addition, JCAHO is required to inform HCFA in advance of changes to their 
standards or procedures. 

State Certification and Survey Agencies 

State Certification and Survey Agencies are responsible for conducting surveys to certify 
compliance with HCFA's participation requirements. The State Agency is responsible for the 
annual survey and certification of all non JCAHO-accredited hospitals within their state. 
Hospitals that have already been accredited by the Joint Commission oh Accreditation of 
Healmcare Organizations (JCAHO) are not included in this process. The State, does however, 
conduct an validation surveys at a small sample of JCAHO-accredited hospitals. After 
completing its survey activity, the State forwards findings and recommendations to the RO, and 
the RO forwards findings to the hospital. 



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APPENDIX F 
HOSPITAL MODULE FOCUS GROUP REPORTS 



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APPENDIX F 

HCFA MARKET RESEARCH FOR PROVIDERS 
HOSPITAL MODULE FOCUS GROUP REPORTS 



HOSPITAL FINANCE PERSONNEL 

In most hospitals in the United States, payments from the Medicare program account for a 
substantial share of overall revenue. Financial transactions with the program are extremely 
important to keeping hospitals solvent. Incorrect handling of transactions may result not only in 
the loss of some revenue, but carries a risk of serious legal penalties, including hospital 
shutdowns. Hospitals, therefore, need to understand all the rules and regulations pertaining to the 
Medicare program and to appropriately apply them to financial transactions with their fiscal 
intermediary (FI). 

We conducted three focus groups comprising a total of 20 individuals with extensive experience 
in hospital financial management to discuss issues related to the communication of information 
about the Medicare program. The venue was the 1997 Healthcare Financial Management 
Association's (HFMA) Annual National Institute (June 30- July 2) in Orlando, Florida, which 
was attended by more than 1 ,000 individuals from around the country, representing a wide range 
of organizations and professions in healthcare finance. 

The focus group participants were recruited by Westat, using registration information provided 
by HFMA. We solicited individuals from around the country, and from the range of hospital 
types (see Exhibit F-l). Small and large hospitals, research and teaching institutions, public and 
private organizations all were represented. Five participants were Chief Financial Officers, four 
were Controllers, and the rest held a variety of jobs in finance, billing, and managed care in 
hospitals, either currently or in the recent past. 

Each focus group lasted one hour, and generally followed the focus group guide prepared 
beforehand (Exhibit F-2). Participants were given lists of communication methods, key 
document types pertaining to the Medicare program, and some issues that had arisen in earlier 
phases of this project, to aid the discussion. A moderator and note taker from Westat were 
present at each focus group, and the sessions were taped. 

This report brings together the themes that emerged from the focus groups, and the suggestions 
for improving Medicare communications that were offered by the participants. The major subject 
areas are: 

♦ Communication with fiscal intermediaries 

♦ Communication with and information from HCFA 

♦ HCFA communication with beneficiaries 

♦ Suggestions for improvement 



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The opinions and ideas reported here are strictly those of the focus group participants, and not 
those of Westat staff. 

Introduction 

Most of the information about Medicare billing and claims comes to hospitals through FIs, so it 
is not surprising that the intermediaries — and not HCFA — were the focus of most of the 
discussions. Hospitals view the FI as an extension of HCFA itself, not as an independent entity. 
They equate their communication with the FI as communicating with HCFA The majority of 
participants had never spoken directly to a HCFA employee, either at Central Office or at their 
HCFA Regional office. The majority of hospitals — particularly the smaller ones — rely on 
consultants to help with claims issues that arise. 

Communication With Fiscal Intermediaries 

Rapport 

General rappon with FI staff varies, but many hospital personnel reported good relationships. 
The quality of the rapport was not always consistent with the FT s performance, however. In once 
case, for example, a participant reported a congenial relationship, but at the same time, often got 
incorrect information. In addition, good rapport was reported with the audit staff of one FI, but 
not necessarily the claims staff (and in another case, vice versa). Rapport is dependent on many 
things, and often comes down to personal characteristics rather than systematic differences 
among FIs. Overall, however, FIs are rarely viewed as consistently helpful partners. Wariness 
characterizes the relationship of the hospitals to FIs, according to the focus group participants. 

Interpersonal interactions often play a significant role in the way a hospital is treated by an FI. 
One participant described the situation in which the FI appeared to retaliate by holding up a 
GME payment after the hospital's CFO had a clash with the main audit manager. Several other 
participants were also aware of such cases. 



We have a good rapport with our FI. The only concern I have is that many times we get incorrect 
information. Our reimbursement rep is a very nice person but I think from time to time, instead 
of telling us she doesn 't know, she will give us an answer and it will be wrong. 



Incentives and Impartiality 

One participant described it as the FI not being a true "intermediary," that is, a neutral party 
applying the rules. The FI's aim appears to be to reduce expenditures wherever possible, and this 
results in what appears to be finding all billing "errors" that go against the hospital, but 
overlooking any that would increase the hospital's revenue. One participant, who had worked for 
an FI 20 years ago, stated that at that time, FI personnel saw themselves as there to help the 
hospital. He speculated (and a few others agreed) that HCFA's incentives to the FIs might be 
partially responsible for this shift in approach. 



Barents Group LLC 82 April 16, 1998 



Consistency 

Incc asistency in applying the rules of M dicare was one of the first issues brought up by 
participants in each focus group. This includes the lack of consistency of handling claims and 
audits within a single FI, as well as a lack of consistency across the country in how rules are 
applied generally. Several participants had worked in hospitals in different parts of the country, 
and knew first-hand that HCFA rules were applied differently. A numbe r of participants also 
reported that regional inconsistencies were a very common topic of discussion among hospital 
pe r sonnel attending national professional meetings. 

Another type of inconsistency occurs in places where there are two FIs: one dealing with the 
hospitals and the other, with the beneficiaries. Two participants in different parts of the country 
were in this position, and they stated that the two FIs not infrequently interpreted rules 
differently, resulting in the hospital and the beneficiary receiving conflicting information. 

Timeliness 

There are issues about timeliness both on the claims and audit sides. With regard to claims, 
hospitals often don't receive notice of changes in procedures until shortly before, or even a 
month or so after, the change is to be implemented, according to several participants. This causes 
significant additional work, going back through claims that have already been submitted to adjust 
them. One person cited an example of a recent change in billing for ambulances, which they were 
notified of three weeks after it went into effect. Most participants agreed that information in the 
FI bulletins often comes too late for them to implement changes in a timely manner. 



A lot of times we '11 get information from HCFA after the fact. We 11 get a new rule or regulation 
in November, and it was effective October 1. 



Participants complained of audits occurring anywhere from 1 to 4 years after the calendar year 
being audited. Regardless of how late the audit is, the hospital is given little time — 30 days was 
cited by several people — to make the required adjustments. In addition, if problems are found, 
the hospitals often must go through every subsequent year's cost reports and adjust them to 
reflect changes required by the FI. 

One participant reported a major leap in efficiency and timeliness when his hospital was assigned 
to a different audit team within their FI. This team uses "limited scope audits" to target the most 
problematic areas, rather than comprehensive audits, and is willing to work collaboratively with 
hospital personnel to resolve problems. 



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We just had our- audit Jhe first week of June (1997) and that was for our 1995 fiscal year. Wejvst 
completed, on Monday, our 1997 report, but were getting audited for 95. They'll send us the 
adjustments and we '-11 have to turn them around in 30 days, something ridiculous. I think to 
myself wait a minute, it took you 2 years to get out here and do the audit and we 've got to turn 
around the adjustment report in 30 days. What 's fair about this? Then the hospital 's on the 
defensive. We've_got to get our stuff together and figure out what we're going to oppose. And 
we 're always guilty unless we prove ourselves innocent. They 're the one with the big stick. 



Knowledge and Accuracy 

Many participants reported receiving incorrect information from FI personnel. Some possible 
explanations as to why this happened were offered. Three interrelated issues that were commonly 
voiced were 1) the relatively low professional level of employees, 2) rapid turnover in FI 
personnel, and 3) lack of sufficient training for new personnel. Participants said some FIs also 
appear to be short staffed, and personnel simply don't have the time needed to get information to 
answer questions thoroughly. Two individuals mentioned that reorganizations at the FIs had 
resulted in the most experienced people retiring, taking with them a large body of knowledge, 
which was not replaced. FI personnel appear to be reluctant to say that they don't have an 
answer, and instead, give incorrect information. In the experience of some participants, FI 
personnel also do not necessarily transfer a caller to someone more knowledgeable, but feel 
obliged to respond themselves. The people most often answering the phones were said to be 
clerks, who do not have adequate knowledge of the Medicare program. 

Several participants mentioned that FI personnel often cannot provide further explanation or 
clarification of information contained in FI bulletins. One example was an attempt to clarify 
billing rules for outpatient dialysis. The FI could not help, and the hospital was left to interpret 
the provisions on its own. The person who offered this example also mentioned that the audit 
staff of their FI are very knowledgeable and helpful, but because the provision they were trying 
to clarify was a new one, the auditors — who themselves were working on audits of earlier 
years — were not familiar with it. 

Communication With and Information From HCFA 

Not a single participant had extensive direct dealings with HCFA. About one-third of the 
participants had at one time spoken to HCFA personnel, either at the Central Office or their 
Regional Office. Several participants voiced frustration at the difficulty of finding a helpful and 
knowledgeable person in the large HCFA bureaucracy. They reported being placed on hold for 
long periods of time, and being transferred many times before reaching a person willing and able 
to answer a question. 

The Medicare manuals are the most prominent printed materials produced directly by HCFA and 
used by hospitals. The hospital personnel who use the manuals regularly are adept with them, but 
suggest they could be indexed better and easier to update. Virtually all hospitals also use CD- 
ROM versions of the manuals, which are produced by HCFA itself and by commercial 
publishers. Most participants reported that their hospitals use commercial versions (some were 



Barents Group LLC 84 April 16, 1998 



unaware that HCFA_published a version of its own), citing easier searching and, in particular, 
more interpretive material. 

Few participants had used the HCFA website, and a number were unaware of its existence. 
Access to the internet appears to be limited in many hospitals. In most cases, only certain 
individuals have access, and in others, there is no access at all. 

HCFA Communication With Beneficiaries 

Participants reported that HCFA's communications with Medicare beneficiaries have ceitain 
indirect effects on hospitals. This subject was raised by a small number of people, but most 
participants were in agreement on the general issues. First, the hospitals find that beneficiaries 
simply don't understand the Medicare program well enough, and it falls to the hospitals to 
educate them. Some personal experiences of trying to get information from HCFA or the 
Medicare carrier on behalf of aged parents underscored the difficulty of getting answers to 
questions from the program itself. 

A second issue is that there is tendency for patients to believe that the hospitals themselves are at 
fault or acting inappropriately when items are not covered by Medicare. The hospitals believe 
they are just applying the rules, but the language used in correspondence from Medicare to the 
beneficiaries often creates or fuels existing suspicion among beneficiaries. Even something as 
seemingly clear-cut as Medicare's lack of coverage for outpatient drugs is misunderstood by 
some beneficiaries as a restriction imposed by the hospital. One hospital reported that they have 
actually absorbed the costs for outpatient drugs on occasion, so as not to alienate an outraged 
patient. 

Another participant described a common problem in his hospital. In his state, different FIs 
communicate with the hospital and the beneficiary. Often, the beneficiary receives a letter 
disallowing a claim up to a week before the hospital is notified. The beneficiary brings the letter 
to the hospital, which may not have sufficient information to explain the situation satisfactorily. 
Again, in this case, the beneficiary may blame the hospital both for the disallowance and for not 
being able to explain the reasons behind it. 

Training 

Participants in all groups complained that neither the FIs nor HCFA offered enough training 
opportunities for hospital employees. Most would welcome greater access to training both for 
new personnel and in more advanced areas. 



Barents Group LLC 85 April 16, 1998 



The last time our fiscal intermediary offered us any kind of training was probably 3 or 4 years 
ago, and the only time they offer us any training is when the Medicare cost report forms change. 
As far as they're concerned, there's no other issue. I'm not saying they need to have separate 
meetings for us for training. Our HFMA has three state meetings a year. They could just have a 
set half-day program at every state meeting which would be the intermediary's chance to update 
all the people on all the latest changes and how we should handle them — not just what they are — 
and this would be communicating to the whole state, one time, everyone would be hearing the 
same thing. At each of our statewide meetings, the state hospital association has a Friday 
morning 2-hour session where they go through state changes. So the intermediary or HCFA 
could do that, too. 



New Information Hospitals Would Like From HCFA 

At the end of each focus group session, participants were asked about information they'd like but 
don't currently get about the Medicare program, and for suggestions for change that they 
believed would lead to a major improvement in communication. In the first category, new 
information, the> asked for the following: 

♦ A newsletter from HCFA, like the CCH newsletter, with executive summaries of new 
regulations. This would especially help small facilities, which may not be able to afford the 
subscription price of a commercially published newsletter. 

♦ More information about the extent and limits of Medicare coverage that the hospital can 
supply to beneficiaries. 

♦ To receive copies of the same information on policy changes that HCFA sends to FIs. 

♦ Names and phone numbers of resource people for different topics at HCFA. 

One Improvement HCFA Could Make in Communication About Medicare 

Many constructive suggestions were made to improve communication about Medicare. The most 
frequent general suggestions had to do with generally improving the relationship between 
hospitals and HCFA, to become more collaborative and less punitive. More concrete suggestions 
were offered relating to the clarity and timing of information received about Medicare, mainly 
from the FIs. The specific ideas offered for HCFA were: 

♦ Explain the rules more fully. The JCAHO manual is a good example to follow, with a 
statement of the rule followed by examples. This type of explanatory material could be 
placed on the HCFA website. 

♦ Improve the way HCFA explains the program to beneficiaries. 

♦ Be clearer in their explanations to FI personnel on changes in rules, so that the intermediary 
can better explain the changes to hospitals. 

♦ Work to make billing decisions consistent across FIs. 

♦ Assure that its employees dealing with Part A of Medicare have a working knowledge of how 
hospitals operate. 



Barents Group LLC 86 April 16, 1998 



♦ Tape all teleconferences and make them available to those unable to attend. 

♦ When fraud and abuse allegations hav . been made that turn out not to be accurate, HCFA 
could publicly accept some of the blame, e.g., for problems arising because of its own 
mistakes, or because of unclear explanations about what is and isn't allowed. 

Summary 

Hospitals generally have little direct contact with HCFA, either the ROs or CO. For all practical 
purposes, the FI is their sole interface with Medicare. The exception is enforcement actions 
undertaken directly by HCFA, and other sporadic communications. Hospitals may not be aware 
of which Medicare information they get from their FI is actually coming as a pass-through from 
HCFA, and which is generated by the FI itself. The comments and suggestions made by the 
focus group participants apply both to the program as a whole and the FI. 

The clearest message we heard is that hospitals do not believe that they are treated as partners by 
HCFA and the FI, but feel as though they are under constant suspicion of wrongdoing. Focus 
group participants believed that improved collaboration with hospitals and better appreciation of 
their operation would go a long way toward improving all facets of how the Medicare program 
works. 

Hospitals would welcome more specific guidance on implementing new or complicated 
Medicare policies. They believe that many instances of alleged fraud and abuse in Medicare arise 
from poorly-articulated policies that the hospitals have difficulty clarifying. They also felt that 
clearer explanations of audit and reimbursement policies might substantially reduce hospitals' 
vulnerability to allegations of fraud and abuse, which they believe are often the result of 
inadvertent errors. 

A common complaint was that high rates of turnover and inadequate training of FI personnel 
lead 10 inaccurate or misleading communications to hospitals. While the hospitals rarely attempt 
to get information directly from HCFA, some of those who did felt that there was also a problem 
with HCFA personnel, both at the RO and CO levels, not being fully informed about the 
program, and being unable to resolve issues for hospitals (or providing incorrect information). 

Participants from the hospitals felt they were under constant pressure to produce information 
according to a strict schedule. However, they complained that the FIs, and possibly HCFA itself, 
do not adhere to these schedules. Several hospital representatives reported cost report audits 
taking place three or four years beyond the calendar year of the report. Even in those instances, 
however, the hospitals were given very little time to respond to queries and to make corrections 
once the report was delivered to them. 

Timeliness is also a problem in the implementation of new policies. Hospitals report receiving 
the information that a change is required days before, and sometimes after, the date the change is 
to be put into effect. 



Barents Group LLC 87 April 16, 1998 



The hospital representatives in these focus groups expressed a desire to improve communication 
with the FIs and with HCFA. They would like the program itself and the communications they 
receive to be more transparent, and have made a number of suggestions that they believe would 
move in that direction. 



Barents Group LLC 88 April 16, 1998 



EXHIBIT F-l 



CHARACTERISTICS OF HOSPITAL FOCUS GROUP PARTICIPANTS 



State 


No. of 
Beds 


Location/Type 


% Revenue 

from 
Medicare 


Title of Participant 


California 


NA 


NA 


NA 


Controller 




1,000 


research and 
teaching 


40 


Associate Director of Finance 




350 


isolated public 


25 


Controller 


Florida 


323 


NA 


53 


Reimbursement Specialist 


Indiana 


100 


suburban 


NA 


Director of Accounting 


Iowa 


90 


rural public 


65 


CFO and Assistant administrator 


Kansas 


121 


small chain 


73 


CFO 


Kentucky 


75 


county 


NA 


CFO 


Louisiana 


231 


acute care 


NA 


Controller 


Mississippi 


490 


acute care 


45 


VP Finance 


Nebraska 


300 


city-owned 


NA 


Managed Care Officer 


Nevada 


650 


acute care 


28 


Director, Patient Financial 
Services 


New Mexico 


283 


acute care 


50 


Chief Accountant 


Ohio 


1,000 


specialty center 


NA 


Finance Manager 


Oklahoma 


NA 


42-provider 

multispecialty 

clinic 


NA 


CFO 


S. Carolina 


525 


acute care 


38 


Billing Director 


S. Dakota 


225 + 
85 ltc 


acute and long- 
term care 


NA 


Director Accounting 


Texas 


NA 


fully-integrated 
health system 


40 


Director, Managed Care 


Virginia 


260 


affluent area 


40 


Controller 


West Virginia 


233 


NA 


NA 


CFO 



NA = not ascertained 



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89 



April 16, 1998 



EXHIBIT F-2 

.HCFA MARKET RESEARCH FOR PROVIDERS 
HOSPITAL FOCUS GROUP DISCUSSION GUIDE 



Introduction 

My name is Garrett Moran and I will be moderating this focus group. My colleague, Hellen 
Gelband and I work for Westat, an independent research firm. This project is funded by the 
Health Care Financing Administration (HCFA), as one part of a broad effort to improve their 
communications with their partners in operating the Medicare program, including hospitals, 
doctors, and others. 

Our major focus will be on communications, rather than on specific policies. The goal of this 
session is to find out from you how HCFA might improve the way it communicates with 
hospitals, both directly and through other organizations, including the fiscal intermediaries, peer 
review organizations, state survey agencies, or others. We'd like to know both where there are 
problems in communications, and what you think works well. 

Before we get started, you should know that everything you say will be kept confidential. Neither 
your names nor the names of your organizations will be listed in our report, so please feel free to 
speak frankly. 

Discussion Guide 

Let's start by having you introduce yourselves and the organizations you work for. Please tell us 
your name, what type of hospital you work for, how big it is, your role in the organization, and 
where it's located. One of our interests is in the ways that communications differ across the 
country. You don't have to give the actual name of your organization, but it's fine if you'd like 
to. 

Let's start by thinking about some of the different ways you get information about the Medicare 
program. On side one of the sheet in front of you is a list of some of the different methods HCFA 
or its contractors use to communicate information. Which of these methods do you use, and 
which do you like or not, and why? 



Barents Group LLC 90 April 16, 1998 



Side 1: Communication Methods 

(on handout given to participants) 

Written materials, such as paper version of the Hospital Manual, FI bulletins, or 

correspondence sent by regular mail 
CD-ROM,.such as CD-ROM version of the Hospital Manual 
HCFA worldwide web site 

Verbal communications, either in person or by telephone 
E-mail, and electronic data transfers, including the Common working file (CWF) 
Fax distribution of materials 
Conferences and training sessions 
Others 

[Record answers on flip chart. Spend 10-15 minutes letting everyone who wants to contribute 
do so]. 

Now let's change to a discussion of some of the more important Medicare communications 
processes or operational areas. On side two of the sheet in front of you is a list of processes or 
areas that others have considered important. Are there items on this list, or others you might 
think of that are important to you, where the communications have worked especially well, or 
where communications really need to be better? I'd also like you to think specifically of 
information in any of these areas, or others, that you need from HCFA, but aren't getting now. 

Side 2: Communication Processes and Operational Areas 

(on handout given to participants) 

Claims and billing 

Beneficiary communications 

Quality assurance and improvement, including PROs 

Regulatory and policy issues and changes (communicating with HCFA central office, 

regional offices, and FIs) 
Cost reporting 
FI audits & appeals 
Medicare as a secondary payer (MSP) 
Managed care 
Survey/Certification 
Fraud and abuse 
Research 

Graduate medical education 
Others 

[Record answers on flip chart. Spend 15-20 minutes letting everyone who wants to contribute 
do so]. 



Barents Group LLC 91 April 16, 1998 



Thank you very much. I think you've all made some very good points. In the few minutes we 
have left, I would like you to think about one or two things that HCFA could do that would help 
most in improving communications with hospitals. Of all the things we've discussed today, or 
others that haven't come up yet, what one or two activities do you think would be most helpful? 

[Record answers, on flip chart. Spend 10 minutes letting everyone who wants to contribute do 
so]. 

Thank you all very much for your participation. I think the information you've provided today 
will be very helpful to HCFA in improving their communications with you. Enjoy the rest of 
your meeting. 



Barents Group LLC 92 April 16, 1998 



FISCAL INTERMEDIARIES 

In most hospitals in the United States, paym its from the Medicare program account for a 
substantial share of overall revenue. However, most hospital personnel responsible for finance 
and accounting will never, or only rarely, communicate directly with individuals at HCFA itself, 
either the Central or Regional Office. To hospitals, HCFA is represented exclusively by the fiscal 
intermediary (FI). Virtually all official Medicare information comes from the FI, and hospital 
personnel do not know, and are not necessarily concerned with, with the original source of that 
information. 

In focus groups with hospitai personnel, most of the issues raised had to do with communication 
between the hospital and the FI. Those participants, however, were not in a position to know 
whether the problems were rooted within the FI itself, or whether they reached back to the FI's 
relationship with HCFA, and the information flow between those entities. For HCFA to fully 
understand and address the communications issues of hospitals, it is imperative to understand the 
FI perspective on their role in between HCFA and hospitals. To gather this information, we 
conducted two focus groups with personnel from FIs to find out about how HCFA communicates 
with them and how they, in turn, communicate with the hospitals they serve. 

The first focus group, which lasted an hour and a half, took place at a Blue Cross/Blue Shield 
Association (BCBSA) regional training meeting for Medicare auditors, in Whitefish, Montana, 
on July 30, 1997. Six individuals from HCFA region 8 (Denver) attended. We held a second one- 
hour focus group by telephone conference on August 11, with 11 individuals from Blue 
Cross/Blue Shield (BC/BS) FIs in seven states in regions 2, 4, 5, 7, and 9 (see Exhibit F-3). The 
discussion guides for these focus groups are included as Exhibits F-4 and F-5 of this report. 

Westat recruited individuals for the Montana focus group from the registration list for the 
training meeting, which was supplied by BCBSA. BCBSA also provided a list of suggested 
participants for the telephone focus group. Most participants had many years of experience with 
their respective companies working for the Medicare program, and a few had had similar jobs 
with FIs in other parts of the country. For practical reasons, it was not possible to recruit 
individuals from non-BC/BS intermediaries, but since the majority of intermediaries are 
currently BC/BS plans, this should not introduce significant bias into the results. 

This report summarizes the discussions at both FI focus groups, including suggestions for 
improving Medicare communications that were offered by the participants. The major subject 
areas are: 

♦ Commumcation flow from HCFA to FIs, 

♦ Opportunities for direct contact with HCFA, 

♦ Communication with hospitals, 

♦ New information FIs would like from HCFA, and 

♦ Desired changes in communication process. 



Barents Group LLC 93 April 16, 1998 



Introduction — 

The discussions covejred a variety of issues related to communications from HCFA: sources and 
types of communications, timeliness of information, and clarity and usability of information. 
This included paper and electronic items on specific topics, as well as the general area of 
exchanging information with HCFA, e.g., in educational forums and through advisory groups. 
There was less discussion about FI communications with the hospitals they serve, since most 
such communication is routine, and there are a limited number of ways in which informat : on is 
transferred. 

Communication Flow From HCFA to FIs 

Information Flow 

Most information flows to the FIs through the HCFA Regional Offices (ROs). One participant 
estimated that about 75 percent of the communications arrive from the RO, and the rest come 
from HCFA Central Office (CO). At least several hundred communications are received each 
year. Messages are sent as needed, not on a regular schedule. Over the last few years, most of the 
communication has been coming in electronic format only. 

It was the impression of the participants that some ROs routinely pass on communications they 
get from HCFA CO unaltered, or with comments attached, while other ROs rewrite much of the 
information before sending it to the FI. 

Paper vs. Electronic Communications 

There was a consensus among the telephone focus group participants that, in general, only 
material received in hard copy was considered "official." E-mail messages from ROs are written 
much more informally, and it is not always clear to recipients whether the information should be 
considered official. One person stated that she did not believe there was an equivalent review and 
sign-off process for e-mail as there was for hard copy mail within the RO office. Greater 
confidence in e-mail information on the part of the FI personnel might be engendered by a more 
formal presentation and knowledge of how the information was generated. 



On e-mail transmissions that are more informal— instructions and memos — I find that they don 't 
have all the details that you'd like. Also, many times when we get those, I'm wondering if they're 
"official communications. " Many times you get them from people you don 't even know. That 
concerns me. 



E-mail seems to be much more informal than if you get something in writing with someone 's 
signature on it. 



Content of Communications 

Participants reported that much of what is received is clear and easily interpreted. However, a 
significant number of items each year, including changes in billing and cost reporting policy, are 
very difficult to interpret and apply in the situations that arise in the course of Medicare 

Barents Group LLC 94 April 16, 1998 



transactions with hospitals. They felt that HCFA does not provide enough information to the FI 
to inform the provider about how to propei'y bill for services. The communication will state the 
rule, but provides no'examples or clarification. The FI must resolve uncertainties by researching 
and asking questions, and then ultimately communicating their interpretation in the FI bulletin. 
At times, FIs may have to change their interpretation when new information is received, and 
participants reported that this tends to erode the relationship with hospitals, who see the FI as not 
understanding the rule. 

Another complication reported by participants arose when some of the letters from HCFA 
contained a disclaimer stating that FI cannot use the letter as reference, i.e., they cannot show it 
to the hospital or identify the letter as the source of a change. Not surprisingly, providers often 
ask for documentation before implementing a change, and the FI has nothing that it can show. 
Participants feel that these episodes may damage the relationship between the FI and the 
provider. 

Participants reported that HCFA policies are usually stated in very general terms, and it is 
sometimes impossible to know what HCFA wants. An example given by a participant was a new 
policy on levels of pension plan funding for hospital employees (which can affect allowable costs 
■r\ier Medicare) that came as a manual revision. The policy statement seemed unclear and used 
;:'tiology the participant didn't think was appropriate to the actuarial issue it was addressing. 
In the participant's judgment, it appeared to have been written by someone who did not have a 
clear understanding of the issue, and it caused significant problems for the auditor attempting to 
implement it correctly. 



Many times, the communication that we get and have to implement takes a lot more explanation 
than we get from HCFA: how does the directive translate to the provider being able to bill for 
the service? From an education perspective, it's up to us to interpret how it applies to billing. 
Thai hads to the need for clarification and reclariflcation of one issue or another, and often we 
have to do that without further help from HCFA. 



Many times HCFA uses the words "contractor" and "carrier" interchangeably. Sometimes if 
they're talking just to the Part A intermediaries, it's very hard to discern whether they're just 
talking to Part A intermediaries or to Part B carriers. I have a situation right now, where I had 
been asked for a deliverable for August 8, and finally have come to the conclusion, after input 
from the regional office, that it is intended for Part B. In our state, Part B is a different 
organization. 



Timeliness of Communication 

Three issues related to timing were raised during the focus groups. First, there are sometimes 
problems of insufficient lead time to implement new policies. An example was when HCFA 
changed the prospective payment for capital and the FIs had little time to implement the change. 
The FIs are anticipating a similar short lead time when HCFA releases its policy on prospective 
payment for nursing homes. 



Barents Group LLC 95 April 16, 1998 



The second issue deals with HCFA pushing back the implementation dates for new policies. In 
these cases, FIs may be notified of a change, and they then notify their hospitals. HCFA then 
notifies the FI of a dslay in implementation, and the FI must go back to the hospital — which may 
already have made the appropriate changes — with the new implementation date. One participant 
cited a change in the End Stage Renal Disease program claims process that has been delayed 
three times. 

The third timing issue has to do with short turnaround times for getting information to HCFA. 
This seemed to be a general theme, related to many kinds of items, with concurrence by most 
participants. Their consistent concern was that HCFA does not allow sufficient time for FIs to 
produce the needed information. 

Effect of HCFA Communications on Consistency Among FIs 

According to the participants, some of the often mentioned inconsistencies in how Medicare 
cla ; ms are handled by FIs appear to arise from differences in interpretation and information 
provided by ROs. They reported finding out ajout these differences in various ways. In some 
cases, an RO will reply to an individual query from an FI and provide information that has 
substantial policy implications. But that letter will not be routinely provided to other FIs, and 
may not be consistent with the positions of other ROs. When FIs meet, they often bring with 
them letters from the RO to share with others, and at this time confirm that information was not 
provided to all FIs. 

A participant from Region I reported a recent example in which only one FI received relevant 
information on an issue related to occupational and speech therapy. The communication reported 
addressed a problem that was significant for the entire country, yet only one FI received the 
explanation. 

Participants reported learning of differential handling of issues among FIs when providers are 
reassigned after FIs have dropped out of the Medicare program. This causes some problems for 
the providers, as they must change their procedures to accommodate the new FI. 



If we had some sort of centralized communication logs, we 'd know that HCFA, in fact, put out 5 
memos this month, and those 5 were disseminated to all the intermediaries. 



Region 5 does send out an "identical letter log" of all the identical letters they've sent out in the 
month, or quarterly, I'm not sure. That is a big help, because then we go and check and see if 
there are any we have not received. For Central Office correspondence, we don 't have anything 
like that, though, and of course, we don 't know what other regional offices are sending out. 



A times, there is something straight from the regional office that is developed there and sent out. 
The problem with that is one region hears about something but it 's not communicated to the 
other regions, so a lot of times there are inconsistencies amongst the regions. A lot of regions 
haven 't issued any communication, and maybe they don 't even agree with what one regional 
office sends out. That's a problem. 



Barents Group LLC 96 April 16, 1998 



HCFA Web Site 

Most F T offices reportedly have access to the i ternet and can get to the HCFA website. Several 
FI offices have assigned someone to look at the website regularly, but for the most part, this has 
not worked satisfactorily. Because it is time-consuming to look through the web site for new 
items, the task is assigned to a clerical person. But the staff members who have the time may not 
have enough background to know what to look for. The result is that the website is not browsed 
as often or as thoroughly as it should be. The participants felt the web site would have to be 
reorganized if HCFA intends FIs to use it more routinely, or as a substitute for other types of 
communication. On a positive note, one participant reported success in using the website to find 
the answer to a question from a provider about a change in rules for Medicare as Secondary 
Payer. 



We have access to it, but we've found it difficult to find somebody... to go through it... It would 
take a higher level person to look around and see what 's out there, and what we would be 
interested in. The higher level in management doesn 't have time to go looking around. If you 
give it to a lower level person — secretary or clerical — they may not blow what to look for, so 
we 've had a real hard time with this. We don 't go in there as much as we 'd like to. 



When we have a question about a policy, we 're more apt to browse the MIMor the MCM, which 
we have on CD-ROM to locate an answer first before we 'd ever go to the internet. 



Providers were calling us on the MSP change [in the coordination period from 18-30 days], and 
we were able to find that information on the internet. 



HCFA Manuals 

Participants reported using both the HCFA and commercial versions of Medicare manuals on 
CD-ROM, but both the FIs and the hospitals continue to rely heavily on the paper manuals. An 
issue relating to the paper manuals, which was reported by FI customer service representatives, is 
that they are never entirely sure that the manual they are using and the one their hospitals are 
using are the same. This is because updates are sent to them late, and there is no way to know 
whether there may be updates they have not gotten. They would like confirmation, e.g., that a 
section dated 1980 really has not been updated since then. To alleviate this problem, it was 
suggested that an index of sections with most current dates of revision could be produced and 
kept up to date for distribution the FIs and hospitals. 



From my perspective, as an educator to our provider community, the thing that I'd like most 
would be current manual updates. Facilities get the manual for their type of facility at the time of 
certification. But we don 't get the updates— the pages that should replace older ones — on a 
regular basis. We 're trying to tell the facilities, this is your manual — keep it updated and use it, 
and we quote from it, only to find that we don 't have the most current pages. Medicare takes an 
awful bad rap because we 're saying one thing in the newsletter, but the manual says something 
else. It would go a long way in providers having more confidence in the Medicare program. 



Barents Group LLC 97 April 16, 1998 



We nee I to have more timely manual transmit ', lis. We can go to our manual, which we call our 
"bible, " with reference to our providers, only to find that we haven 't received an update in 7 or 
8 years on an issue, and it just doesn 't look good for the program. 



Opportunities for Direct Contact With HCFA 

1 here was a consensus at both focus groups that FIs would like to have more direct contact with 
HCFA, but that over the last few years, their opportunities for interaction have actually 
diminished. The two types of contact that they spoke about are: 1) interaction to learn about 
changes in Medicare and to solve problems in face-to-face encounters, and 2) having input into 
new policies and changes. 

Obtaining Information and Resolving Problems 

In the first category, participants expressed interest in having more forums for addressing 
problems and learning about new policies. An example are HCFA audit conferences, which used 
to be held annually, and were very well attended. The last one was held two years ago. There was 
considerable support for reinstating these annually. 

FIs would like to have regular forums in all relevant areas at which HCFA personnel would be 
present to answer questions directly. It was also reported that, although HCFA encourages 
questions to be submitted in writing at national meetings of various kinds, which they promise to 
answer in writing, these questions are often left unanswered. 

Getting answers directly from HCFA is also reported to be a problem at times. One participant 
expressed frustration with going through the RO for an answer. Several times, the RO has not 
known the answer, has gone to someone at CO, and then returns with an answer that is not 
applicable to the original question. This participant felt that HCFA encourages FIs to go through 
the RO with questions (and discourages direct inquiries to CO), but this is an inefficient system 
at times, exacerbated by staffing cuts at the RO, with many of the most knowledgeable people 
having left. 



We 'd love more chances to communicate with HCFA. The last few years, we 've really lost 
communication with HCFA. 



I'd like to see more opportunities for forums for intermediaries and contractors with HCFA in 
the different substantive areas, maybe on an annual basis. 



We need forums to present problems and let HCFA in on them, so they understand where those 
problems are. Right now, there are no ways for this to happen. 



Barents Group LLC 98 April 16, 1998 



Opportunities for Input Into the Process 

According to participants, HCFA does not regularly solicit input from FIs before putting out new 
policy statements. The FIs believe that certain problems in implementation might be avoided if 
they were consulted when policies were in the draft stage. Participants felt that more consultation 
with FIs could result in smoother and more trouble-free implementation of new rules. A recent 
example offered by one participant had to do with a change in how observation beds are counted 
for cost reports, but others agreed that this was a more general problem. 

Participants complained that some opportunities for input that used to exist have been 
discontinued. For example, HCFA Technical Advisory Groups (TAGs) were replaced by steering 
committees, but many or most of these committees do not meet on a regular basis, and don't take 
the place of the former TAGs, which met quarterly. One participant noted that TAG meetings 
may have become something of an embarrassment to HCFA, because the same issues were 
brought up repeatedly, but never resolved. 

Some participants had been part of BCBSA's own Reimbursement Advisory Committee (RAC), 
made up of representatives of BC/BS FIs from each region. Results of RAC meetings are 
forwarded to HCFA, but HCFA does not participate in the meetings. BCBSA does not have 
similar groups for subject areas other than audit and reimbursement, e.g., medical review, 
customer service. According to participants who worked in those areas, they have no regular 
conduit for feedback to HCFA. 



A lot of times, communications about policy changes from the Central Office are given to us 
without any prior input from the contractors. A specific example of that in the last few months 
has to do with observation beds. There was a change made by Central Office and I'm not sure 
consideration was given to the effect it would have on the contractors. I think it would be good to 
get a lot more input from the contractors before changes are made. 



Many times, policies are handed down from Central Office, and when they get to us, they're very 
difficult to implement. You have to go back to HCFA and talk to them about it, but sometimes the 
decision 's been made and it 's so far down the road that it 's difficult to go back and have changes 
made. 



Communication With Hospitals 

All FIs produce "FI bulletins" of some sort for the hospitals they serve. Most produce these at 
least monthly, but one FI represented in the focus groups produced theirs bimonthly, following 
an agreement with their RO. Most others issue bulletins "on demand," which may be more than 
one per month, if there is a need. 

All the FIs represented had or were developing an electronic bulletin board. It was estimated that 
more than 90 percent of hospitals had computer access to these bulletin boards. Bulletin board 

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notices are used foxJimely reporting of critical new information, and are followed by complete 
reports of changes in the next printed bulletin. FIs believe that only short bulletin board items 
will be read. Users are likely to bypass long items. Also, there is no guarantee that all users will 
see each bulletin board item, so it cannot be relied on as the sole means of communicating 
important information. For items requiring immediate action, at least some FIs use a "Dear 
Administrator letter." 

All the FIs represented claimed that they also put on training seminars for their hospitals. Some 
organize them "on demand" when requested by hospitals, as well as scheduling them 
independently and in conjunction with other associations. A typical example in one state were 
the 13 seminars given around the state in the month of June dealing with Medicare as a 
Secondary Payer. State chapter Healthcare Financial Management Association meetings were 
mentioned by several people as regular venues for FI updates. Articles are also placed in various 
association newsletters. 

One FI maintains a hospital liaison committee that meets quarterly. Representatives of the state 
and local hospital associations and from indiv ; dual hospitals form the membership. Provider 
groups in another state meet on a regular basis and the FI presents Medicare updates at their 
meetings. 

New Information FIs Would Like From HCFA 

At each focus group, participants were asked to think of information they do not currently get 
from HCFA, but would like to get. They offered the following: 

♦ ROs should provide identical information to all FIs on relevant topics, i.e., if an individual FI 
receives a clarification based on an inquiry, the information should be given to all FIs. 

♦ ROs and CO should produce a monthly log of their letters and other communications so FIs 
can check to make sure they've received all items. 

♦ HCFA should release new policies or other changes while still in the draft stage, for 
comments. 

♦ When an FI receives clarification of a policy or billing question from the RO, the RO should 
provide some official indication that the answer is supported by CO and that the issue is 
handled similarly around the country. 

♦ In documents stating policy changes, HCFA should give more examples. 

♦ Indexes to the various manuals should be produced regularly, including the most recent 
revision dates for each section. 

Desired Changes in Overall Communication Process 

Each focus group participant was also asked to name one change in communication that would 
improve the system for them. The following were suggested: 

♦ Hold annual conferences for each major area of Medicare, with an opportunity for face-to- 
face two-way interaction. 



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♦ Reconstitute the4schnical advisory groups. 

♦ Allow FIs a reasonable amount of time to Ropond to various requests from HCFA. Current 
timeframes are often thought to be unrealistic. 

♦ Send out manual updates more promptly. 

♦ Increase use "of electronic communication of reports from FI to HCFA (currently, some 
reports must be sent in hard copy and on diskette via overnight mail). 

♦ Give FIs more lead time in notifying them of changes. 

♦ In communication from HCFA, be more specific about the appropriate recipient — i.e., don't 
address correspondence to "contractor/carrier" if it is really just for the carrier and not the FI. 

Summary 

Several themes emerged from the two focus groups with FI personnel. One message is that there 
is a perceived need for more collaborative resolution of problems between HCFA and the FIs. 
Given the complexity of the program and the myriad variations in hospital operations, there will 
always be a need for direct dialogue to address unanticipated problems. Participants reported that 
this need for interaction is not being met, and in fact, has eroded over the past few years as 
annual forums have been discontinued and advisory groups meet less frequently than before. 

Inconsistencies in interpreting Medicare policies around the country were also a source of 
concern to the participants, not only because they cause confusion within the program, but also 
because they are the target of criticism by the hospital community. Inconsistencies were said to 
arise, in part, because ROs and FIs apply their own interpretations in the absence of adequate 
national guidance to clarify ambiguous policies. There appears to be no routine mechanism for 
sharing this information from one region to another. Participants thought that some of the 
inconsistencies might be eliminated if these decisions, as well as individual resolution of issues 
with HCFA, could be captured in a format accessible to FIs across the country. At the very least, 
FIs would be made aware that interpretations differ, and this could be a topic for discussion at 
meetings. 

The FIs said they would like to play a more active and consistent role in the way new policies are 
stated and documented before they are sent out in their final form for implementation. They 
recommended consultation with an advisory group of FI representatives in the initial stages, and 
wider circulation of later drafts to FIs for their suggestions. They would like policy statements to 
be accompanied by examples, and thought that the sharing of drafts might be an efficient way to 
generate a range of examples. 

Participants indicated that electronic communication has begun to play an important role in 
linking HCFA and FIs. This change has been welcomed by FIs, in general, but with the 
understanding that systems will be continually refined and updated. The HCFA website is found 
useful, but time-consuming to browse regularly. They suggested that reorganizing the material, 
and possibly highlighting new material, would improve the usability of the web site. Increased 



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use of direct electronic submission of reports could streamline some reporting, and save time and 
money. 

Overall, FIs appear eager to improve communications with HCFA. They offered many specific 
suggestions for improvement, but the clearest message is the need for ongoing interaction and 
open channels for two-way information exchange. 



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EXHIBIT F-3 

STATES AND JOB TITLES OF FISCAL INTERMEDIARY FOCUS GROUP 

PARTICIPANTS 



States Represented: 

Arizona 

Georgia 

Illinois 

Iowa 

Montana 

New York 

North Carolina 

South Dakota 

Texas 

Job Titles: 

Audit and Reimbursement Manager 

Audit Manager 

Customer Service Manager 

Customer Service Representative 

Customer Support and Communications Manager 

Lead Auditor 

Medicare Coordinator 

Medicare Director 

Provider Affairs Representative 

Public Relations and Communications Director 

Reimbursement Manager 

Senior Auditor 

VP for Audit and Reimbursement 

VP for Federal Programs 



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EXHIBIT F-4 

HCFA MARKET RESEARCH FOR PROVIDERS 
FISCAL INTERMEDIARY AUDITORS FOCUS GROUP DISCUSSION GUIDE 

JULY 30, 1997 



Introduction 

My name is Hellen Gelband and I will be moderating this focus group. I work for Westat, an 
independent research firm. This project is funded by the Health Care Financing Administration 
(HCFA), as one part of a broad effort to improve communications with their partners — including 
hospitals, doctors, beneficiaries, and others — in operating the Medicare program. 

Our major focus this evening is on communications, not on HCFA policies. The goal is to find 
out how HCFA might improve the way it corr_municates with you, both directly and through 
other organizations, and, in turn, about how you communicate with hospitals about the Medicare 
program. I'm interested both in how things could be improved and in finding out about 
communications strategies that have worked well for you in your work as auditors for Medicare. 

Before we get started, you should know that nothing you say will be attributed directly to you or 
to your organization. I will be summarizing what you say in a report to HCFA, but neither your 
names nor the names of your organizations will appear anywhere in that report. I am tape 
recording the entire session for my own use in writing the report. The tape itself will remain with 
Westat. 

Discussion Guide 

I'd like to start by asking each of you to introduce yourselves. Please tell everyone where you 
work, what your position is, how long you've been there, etc. If you've had previous jobs that 
also might be relevant — say, in hospitals dealing with the Medicare program — please go ahead 
and mention them, as well. 

Major Areas and Items of Communication 

I'd like to set the agenda for the remainder of the session by making two lists. The first will be 
reports and other types of communications that you receive, directly or indirectly, from HCFA. 
Second, the communications you have with hospitals. 

[Record answers on flip chart.] 

I'd like you to set priorities for discussing these, with high priorities to those that are most 
problematic, most amenable to improvement, or for other reasons that you specify. 

[Number items on flip chart.] 



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Let's start going through the lists now. All aspects of communication are open in this 
discuss'on — the mode, that is, electronic, p per, telephone, etc.; the content; timeliness — 
anything that affects the way you do your work. 

[Ask specifically about the HCFA web page and internet availability, if this does not come up 
spontaneously. Also ask about the effect of HCFA incentives on their work] 

Wrap-Up 

In the few minutes remaining, I'd like to focus on two more items. First, is there information that 
you currently don't get about the Medicare program, which would be useful to you. 

[Allow 10 minutes.] 

Last, can you suggest the one or two things that HCFA could do that would improve 
communications with you the most. 



Thank you all very much for your participation. The information you've provided should be very 
helpful to HCFA in improving their communications with you. 



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EXHIBIT F-5 

-HCFA MARKET RESE/ RCH FOR PROVIDERS 
FISCAL INTERMEDIARY TELEPHONE FOCUS GROUP DISCUSSION GUIDE 

AUGUST 11, 1997 

Introduction 

My name is Hellen Gelband and I will be moderating this focus group. My colleague, Garrett 
Moran is also here and will be participating. We work for Westat, an independent research firm 
outside of Washington, DC. The work we're doing on the Medicare Program, and that we've 
asked you to help us with, is under a contract with the Health Care Financing Administration. It's 
part of a broad effort by HCFA to improve communications with their partners— including 
hospitals, doctors, beneficiaries, and others — in operating the Medicare program. 

Our focus today is on communications, not on HCFA policies. The goal is to find out how 
HCFA might improve the way it communicates with you, both directly and through other 
organizations, and, in turn, about how you communicate with hospitals about the Medicare 
program. We're interested both in how things could be improved and in finding out about 
communications strategies that have worked well for you in the past. 

Before we get started, you should know that nothing you say will be attributed directly to you or 
to your organization. We will be summarizing what you say in a report to HCFA, but neither 
your names nor the names of your organizations will appear anywhere in that report. We're tape 
recording the session only for our own use in writing the report. 

You probably know that most focus groups are done in person. This conference call mode makes 
things a bit more difficult, particularly because of the loss of body language. We'll have to see 
how the rhythm gets going and try to make sure that no one is left out. Whenever you start a 
comment, please identify yourself with your first name. We may occasionally "go around the 
room," so to speak, to poll everyone on a question. If that happens, we'll say each name first. 

Discussion Guide 

We have 8 [?] people on this conference call. I'd like to start by asking each of you to introduce 
yourselves. Please tell us where you work, what your position is, how long you've been there, 
etc. If you've had previous jobs that also might be relevant — say, in hospitals dealing with the 
Medicare program — please go ahead and mention them, as well. 

Major Areas and Items of Communication 

I'd like to set the agenda for the next part of the session by making a short list of the types of 
reports and other communications that you receive, directly or indirectly, from HCFA. To save 
time, I'll read through a list I've made up and you can react to it and add to it. 

♦ Bulletins from ROs (RILs), 

♦ Federal Register notices, 

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♦ Program memos-(CO), 

♦ Rulings (CO), 

♦ Manual updates (CO), and 

♦ Prior consults (BCBSA). 

[Record answers} 

Let's start going through the list now and finding out what the issues are related to each of them. 
All aspects of communication are open in this discussion — the mode, that is, electronic, paper, 
telephone, etc.; the content; timeliness — anything that affects the way you do your work. I'm 
interested in the frequency of the items you get from ROs, particularly where that differs around 
the country. I'd also like to know which things arrive electronically and which are only on paper. 

[Ask specifically about the HCFA web page and internet availability, if this does not come up 
spontaneously. Also ask about the effect of HCFA incentives on their work.] 

******************* 

Next I'd like to find out how you communicate Medicare information to the hospitals you serve. 
Again, we'd like to know how often you send information to them, the format of the 
communication, and issues that arise. 

******************* 

[next section if time permits; otherwise skip to wrap-up] 

We'd like to know what your experience has been in initiating communication with HCFA. Who 
do you contact when you need any kind of information? How have those contacts gone? Have 
you gotten the information you need? Have requests been handled efficiently? 

******************* 

Wrap-Up 

In the few minutes remaining, I'd like to focus on two more items. First, is there information that 
you currently don't get about the Medicare program, which would be useful to you. 

[Allow 10 minutes.] 

Last, can you suggest the one or two things that HCFA could do that would improve 
communications with you the most. 

Thank you all very much for your participation. It's been an interesting discussion, and should be 
very helpful to HCFA. 



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CHS LIBRARY 




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